Real estate market news in Canada
What's going on with rental prices?
We wrote recently about the dramatic drop in real estate prices, with discounts as low as $200,000 CAD, an incredible windfall for those looking to buy their homes. However, these are challenging times for renters.
Rents are rising, and competition between those who want to rent a place is not subsiding. Landlords are taking advantage of the opportunity: they have begun demanding rents for several months in advance and are holding auctions, renting space to the highest bidder.
Data from Rentals.ca shows that the average rent for a 1-bedroom apartment in Canada is up 13.7% YTD, with year-over-year rents up 18.5% in Toronto and 19.2% in Vancouver.
Dan Scarrow, president of a Vancouver-based real estate brokerage and consulting firm, believes the reason is the Bank of Canada's key rate hike:
"Higher interest rates don't destroy demand for housing, they just shift it from buying to renting."
Low real estate prices are failing because people have found it difficult to get mortgages because of high rates and have to extend their leases.
Analysts believe that the situation will not change dramatically in the near future. Apparently, the real estate market in Canada will not soon return to normal values.