It looks like $3,000 for a one-bedroom condo is not so unbelievable

Experts believe that Canada’s red-hot rental market will only keep overheating.

According to Rentals, the country’s record immigration targets combined with limited supply have pushed the average price of a one-bedroom condo in Vancouver and Toronto to above $2,500 in March.

In Toronto, the average rent price for a one-bedroom condo showed an annual increase of 22% to $2,506 in March.

“I expect the average price for a one bedroom in Toronto to exceed $3,000 by 2030,” – Marco Pedri, real estate broker at Shoreline Realty Corp. Brokerage, noted.

“People look at that number and don’t believe it, but only 10 years ago the thought of an average bedroom exceeding $2,000 sounded unrealistic, but here we are,” – he says.
The situation is the same on the west coast: in Vancouver, the average price for a one-bedroom unit reached $2,743 in March, marking a 17.3% annual hike.

“It seems that it’s quite easy for the asking price of a one-bedroom unit to exceed $3,000 in Vancouver, and its surrounding areas, during the next seven years,” – Steve Saretsky, owner and realtor of Vancouver-based Saretsky Group, says.

He named the increase in annual inflation and the restrained supply as the two main factors that could push rents above $3,000. However, he added that wages are also expected to rise in order to fight some of the financial pressure.

“Even with sky-rocketing rents people find a way to cope with the market conditions. We may probably see more people moving in, or preferring to live further from large cities and living at home for longer,” – Saretsky explained.

“You’re no longer competing with local incomes, you’re competing with the world and generational wealth if you want to rent or own a home in Canada,” – he noted.

As Canadians are being priced out of big cities that could mean we’ll face population stagnation in those regions.

“People will begin to search for jobs only in areas where there can afford a home,” – Aled ab Lorwerth, deputy chief economist at Canada Mortgage and Housing Corporation(CMHC), said.

In his opinion, large cities may lose their ability to keep growing.

“The longer-term concern is that we can’t find the way how to solve this issue,” – he added.