A new study by a Concordia professor explores the key factors affecting the Canadian real estate market.
From Vancouver to Toronto to Montreal, renters are feeling the pressure from soaring prices. Housing options are shrinking, leading up to an affordability crisis. Why is this happening, and what can be done?
A recent study by Concordia finance professor Erkan Yönder in collaboration with real estate investment company Equiton breaks down the reasons behind the surge in rent prices.
“In the end it is really a problem of supply and demand,” Yönder explained. “Canada brings in thousands of new people every year but we don’t give them enough houses or units, we don’t build enough.”
According to the study, only 424 housing units exist for every 1,000 residents, making Canada the least supplied housing market among the G7 countries (Canada, France, Germany, Italy, Japan, United Kingdom and USA). For example, rent prices are expected to increase by 26 per cent in Toronto and by 52 per cent in Vancouver by 2027.
Yönder encourages the establishment of local policies that could help shift this outcome.
One of the key ways to solve the supply and demand problem, according to Yönder, is to encourage people to move to less populated areas in the country.
“There should be attractive jobs in other provinces to balance the population, so that we spread the demand and decrease the pressure on one location,” he said.
For many Canadians, these numbers aren’t just statistics, they’re a lived reality.
Samuel Chavolla, a mechanical engineering student at McGill, has been renting for three years.
“I’ve lived in multiple places while being here, but I’ve definitely seen a huge change in the rent that is hard to maintain as a student,” he said.
Over the summer of 2023, his rent at a student residence went from $720 to $800.
“In my current apartment, I’m paying $1200, which would have been unattainable if I hadn’t found a full-time job,” he said.
Chavolla’s experience reflects the findings of Yönder’s study: rent pressures that don’t seem to ease, even in cities with rental regulations like Montreal.
Concordia Political Science Assistant Professor Dr. Donal Gill echoed the importance of balancing housing affordability. He noted that Canada’s infrastructure needs to expand at the same rate as its rapidly growing population.
“The basic economics are simple: if you don’t keep building houses, but as the population increases, the price of rent is going to go up very straightforwardly,” said Gill. “The federal government has allowed a rapid increase in immigration without sufficient planning for housing, health, and social services, leaving many questioning whether we’re truly prepared for this scale of growth.”
Gill also said that expanding job opportunities for newcomers could help balance housing demand.
“We know that immigration is good for the country and the economy,” he said. “The problem with immigration in Canada is that we create too many barriers between qualified immigrants and them practicing their trades.”
Canada’s rental market crisis won’t be solved overnight. Yönder’s research suggests that the country needs a comprehensive approach, faster building rates, local job growth, and smarter immigration policies that align with available housing.
