By now, everyone has heard about U.S. President Donald Trump’s proposed travel regulations. Effectively banning refugees and immigrants from 7 primarily-Muslim countries, the new regulations have inspired backlash from across the political spectrum and generated a massive amount of negative press coverage.
What has received comparatively less attention, is the response from the American tech sector. Shortly following Trump’s announcement of the travel restrictions, more than 100 tech companies, including Apple, Google and Facebook, publicly denounced the move.
What does this have to do with Toronto and GTA real estate?
Potentially, quite a lot. The American tech industry depends heavily on foreign talent, particularly from Asian countries. While Trump’s orders are facing strong challenges in the courts, American tech companies are reportedly already considering moving some of their operations to Canada. And, as Canada’s #1 city for tech workers, Toronto is the likely beneficiary.
The potential for growth in jobs and population is obvious. But the benefits don’t end there. In this article, we’ll explore some of the many potential effects of tech companies moving to Canada on the Toronto real estate market. As you’re about to see, almost all signs point to increased demand-which naturally leads to a strong real estate market. We’ll start with the most obvious source of increased demand for GTA real estate: job growth.
If tech companies start moving operations to Canada, Toronto would be the likely target destination. Toronto has the most tech jobs and richest pool of tech workers in the country. Toronto also has price advantages over its closest competitor, Vancouver; even despite all the foreign real estate tax drama, Toronto is still not as expensive as its West coast cousin. Given Toronto’s rich pool of tech talent and comparatively affordable business environment, it would likely see some serious job growth.
It’s not only potential job growth that paints a rosy picture for GTA real estate. Tech companies moving to Toronto would also mean other forms of investment: office space, conferences, networking events, and all of the other trappings of any tech hub. This would increase demand for construction, conference companies, and a host of other businesses, leading to spinoff benefits for the economy.
Despite Toronto’s highly educated tech workforce, the main benefit of tech companies moving to the GTA would actually be population growth. The reason tech companies have their eyes on Canada is mainly because of the immigration climate; they see cities like Toronto as an attractive, Western destination to move foreign-born workers who may not be admitted to the U.S. under Trump’s proposed laws. This would naturally lead to an increase in population and, with that, an increase in demand for residential real estate.
Last but not least, the frosty immigration climate in the U.S. could spell benefits for Toronto’s home-grown startups. According to a recent report by Citylab, Canadian immigration lawyers have been seeing a surge in inquiries from foreign-born tech workers. This means lots of potential new talent for Toronto’s already thriving startup scene… And with all that new talent, comes people needing single family homes, condos, apartments and other rental units.
The bottom line?
Nobody knows yet if Donald Trump’s new travel laws will ever come to pass. Facing significant court challenges, they may never actually be implemented. But with Trump vowing to fight the issue tooth and nail, and tech companies promising to look North in the event that the laws do pass, the potential for a boom in Toronto tech hiring and related immigration is very real. As already mentioned, Toronto immigration lawyers are already seeing a surge of inquiries from foreign-born tech workers.
Should this new investment and immigration materialize, a natural consequence would be increased demand for GTA real estate–meaning several more years of record-breaking sales and price appreciation. If you’re looking to sell a home, this means you’ll get a great offer quickly. And if you’re looking to buy, it means your new property will be a great investment for the foreseeable future.
A win-win situation for virtually everybody involved.