In the major cities as well as small provinces of Canada housing prices are soaring high. Housing prices in the smallest province of Canada is actually found to rise at a faster rate than that of Toronto.
Charlottetown steals the show
There has been a dramatic rise in housing prices in Charlottetown. Due to the previously affordable property price in Charlottetown, many international buyers, as well as newcomers, are trying to acquire a house here, which resulted in a surge of housing prices. The number of new constructions getting the permit in Charlottetown is also rising fast and almost double the number of properties has got approval in comparison to the previous years. These properties will, however, take some time to be completed and become available to buyers but demands continue to increase at a faster rate.
Over the last three years, the prices have increased by 38.5 percent leaving the price hike of real estate in Toronto far behind which have increased 25.3 percent in the last three years. A house in Toronto will cost something around $3.5 million whereas a house in Charlottetown will be priced about $277 thousand dollars but the rate of price hike is certainly much greater in Charlottetown in the last three years which was priced previously at $200 thousand dollars.
Provinces doing well in Canada
Parts of Vancouver Island and Niagara region of Ontario also showed a fast rise in prices compared to other major cities like Toronto and Ottawa.
Out of the various factors that are driving the price hike, there are two major reasons that are responsible for this increase in housing prices.
- Escalation of rental services like Airbnb
It is found the province in Canada with the fastest-growing population was Prince Edward Island. A large number of immigrants were introduced here but the province did not retain as many immigrants. This resulted in many selling their houses, which in turn fuelled the price rise. Further, to make more profit many residents of Prince Edward Island have turned their houses to Airbnb rentals as opposed to the traditional rentals. An analysis showed that out of every 50 private houses in the province, roughly 1 was being used as an Airbnb rental. Owing to this, the rental market has become fluctuating and it is actually more profitable for people to buy homes. Also buying a home is considered to be a less risky venture and a better investment.
The problem with rental services is not likely to be solved in the recent future as one of the main operators in the economy of Prince Edward Island is tourism. As more and more people are looking for affordable places to live, there is a perpetual increase in demand for the houses due to a boost in tourism. This, in turn, will result in houses becoming even more highly-priced in Prince Edward Island in the future. One direct effect of this increase in the housing price is, families are getting cramped in tiny living space as it is becoming more and more difficult to afford spacious houses as before.
Why more people are buying
Attracted by the comparatively lower prices and potential investment, people from other parts of Canada are also looking for properties here. High-end sales, demand for starter homes and luxury homes are also responsible for an increase in the prices. Residents are forced to relocate to semi-detached homes outside the city due to the expenses. Over the last couple of years, the percentage of both home sales and average prices have increased drastically in the province. This has turned out to be profitable for homeowners who are trying to sell their properties but the situation has been extremely difficult for people trying to buy a property for the first time as well as for those who are looking to upgrade their present houses in terms of price and demand. Further, there has been a sharp decrease in the vacancy rates of houses.
Due to the rise in immigration, there is a substantial shortage of rental properties along with soaring rental rates. Inventors are trying to take advantage of the situation by purchasing apartments and income-type houses and holding the same to create a surge in prices. Even mortgage interest rates are rising in Prince Edward Island for instance. All in all, the provinces are faring well in terms of home prices and investors are snapping up more properties in these zones than before.