PEI’s Competitive Real Estate Market Rivals Toronto’s
The province best known for Anne of Green Gables, sandy beaches, and a pastoral lifestyle has surprisingly experienced an increase in housing prices that outdoes even the Toronto market. CBC News has reported that the recent cut-throat market has come about because of the increase in Airbnb rental properties and a rise in immigration as the province was desperate to replenish its qualified workers.
In Charlottetown, house prices have risen dramatically by a 38.5 per cent increase over the past three years. In Toronto, prices only rose by 25.3 per cent during the same time period.
That’s not to say that houses are expensive – quite the opposite. While Charlottetown homes remain relatively cheap at $277,000, it’s a sharp increase from $200,000 the same time last year. It’s the actual increase that’s making news.
Like Toronto, Charlottetown has embraced becoming a multicultural city, yet while immigration has greatly enriched the province’s culture and diversity, new populations bring with them the need for more housing. In 2019, for example, the Canadian Real Estate Association noted that the province’s population increased by 11.7 per cent compared to the same period in 2018.
This has led to some desperate tactics. While it’s a sad fact that many real estate agents go door-to-door looking for houses to sell in an extremely tight market, it’s become standard now in PEI to have individual buyers go door to door in search of a property. “People are banging on doors, saying ‘I really like your house, are you interested in selling?”, Sarah Dennis, a Charlottetown home-owner told CBC News.
Despite the high rates of immigration, however, the high costs of living in PEI had people selling their homes and moving elsewhere – thus driving up the price of housing even more. By comparison, while the costs of living Toronto was also huge, people tended to stay in Toronto due to the number of job opportunities and low unemployment rates. In addition, with the number of diverse communities and various settlement services available, it’s simply more attractive for immigrants to stay in a city that presents as more welcoming.
But Toronto is in an affordable housing crisis. That is in large part because of tourism via Airbnb. This is a city where 6,500 “ghost hotels” – those left vacant for the purposes of short term guests are doing damage to Toronto’s very sparse rental market.
Airbnb has done so much damage to Toronto’s affordable housing market that city council has had to get involved. This month, Toronto City Council called on Airbnb to delist several properties that stand empty most of the year. A recent report by Fairbnb stated that “76 per cent of all Airbnb listings in Toronto are in properties bought exclusively to be used as short term rentals”.
With tourism on the rise in PEI, residents have also been jumping on the Airbnb profit train. CBC News reported that 1 in every 50 private homes was being rented out to the company. A tough market has put renters in a precarious place – where buying makes more sense than renting. “
“The rental market is way scarier right now than buying a house,” Dian Miguel, a PEI resident told CBC News. “That’s why we made that leap to buying a home; we felt we had less risk.”
Who knew that Charlottetown and Toronto would have so much in common?