Blaming immigrants for the housing price surge is so false, it's stupid

By Tom Parkin

September 5th, 2025

BURLINGTON, ON

Housing costs skyrocketed on low mortgage rates. But some blame immigrants, and it’s mostly partisan hackery.

Housing price surge came during low in-migration period

Average benchmark GTA house price with inflow of immigrant and non-permanent residents

No matter how much the facts show they are wrong, some people won’t stop blaming immigration for the cost of housing.

No doubt some of it is driven by anti-immigrant sentiment. But it often just seems to be sheer partisan hackery. Since immigration is a federal responsibility, blaming the housing price surge on in-migration puts the blame solely on former prime minister Justin Trudeau. As a bonus it neatly exonerates any Conservative premiers.

But the data is crystal clear. The immigrant theory of the housing price surge is flat-out wrong. Unless effects can come before their causes.

Prices surged while in-migration hit historic lows; they fell as in-migration increased

Our chart above shows the surge in housing prices started Q1 2020 and ended Q1 2022. Prices rose fastest in the Greater Toronto Area, up 53 per cent in 23 months, creating space for rents to rise behind them. Since Q1 2022, when the boom went bust, prices have fallen almost 24 per cent.

So if the immigration theory is right, high in-migration would be associated with rising prices while low in-migration would be associated with falling prices. But that’s exactly opposite what happened.

In Q1 2020, as prices began their surge, flows of immigrants and non-permanent residents fell to lows not seen for years (see chart below). This was the time of COVID restrictions. In Q3 2020, in-migration even went negative as a net 67,000 non-permanent residents left Canada and only 9,000 immigrants entered. Contrary to the “immigration caused it” theory, prices surged when in-migration was historically low.

In-migration moved above the historic trendline in Q1 2022. But house prices that quarter didn’t increase, as the immigration theory would predict. They fell. And contrary to the immigration theory, as in-migration increased to a peak in Q3 2023, house prices kept falling.

The immigration theory of the housing crisis is a totally false narrative, probably invented for partisan gain, though the Trumpian deportation urge no doubt also plays a role.

Causality 101: causes come before effects, not after

Some people are so committed to their partisan or anti-immigrant bias they will look at this data and still declare in-migration caused the price spike that preceded it.

Actually, they won’t. If they started reading this post they stopped long ago, the moment they realized it didn’t confirm their bias. All the facts and data in the world will never change instrumentally-geared minds. And there’s always a pandering politician waiting to tell them they’re right and the facts are wrong.

But for those who like causes to precede effects, the below chart goes a lot further in explaining what happened, though other factors, including government action and inaction, played a role.

A $600,000 mortgage amortizing over 25 years at 5.5 per cent interest cost over $3,600 a month. At 2.0 per cent — a rate commonly available from 2020 to 2022 — the cost of that same mortgage was just over $2,500 a month. Suddenly, a lot of people qualified for a mortgage that could buy a house, setting off a buying frenzy.

And maybe it’s just another very wild coincidence, but the very month the 0.25 per cent rates ended with rate hikes, the boom went bust. Odd, that.

House price surged during 0.25% rate, fell on rate hikes