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Housing Prices In Canada's Smallest Province Are Rising Faster Than They Are In Toronto

PEI house prices increased 38.5 percent over the last three years.
PEI Real Estate

Young Canadians looking to escape the rising housing prices found all over major cities won't have much luck in smaller communities, either. Even Prince Edward Island real estate is becoming competitive. In fact, housing prices in Canada's smallest province have actually risen faster than they have in Toronto.

Housing prices in Charlottetown have risen dramatically. At a 38.5 percent increase over the last three years, that puts them far ahead of Toronto real estate in terms of price increase. Even though a house in Toronto will eventually run you $3.5 million, prices have only risen 25.3 percent in the last three years

Of course, a house in Charlottetown will only cost you, on average, about $277,000. Still, that's a sharp increase from $200,000. There are at least two major factors driving this increase: immigration and the proliferation of rental services like Airbnb.

In 2018, PEI had the fastest-growing population of any province in Canada, partially due to a large number of immigrants. However, retention of immigrants for the province remained low, so plenty of people sold their homes for a profit, driving prices up.

Similarly, PEI residents have been turning their homes into Airbnb rentals rather than traditional rentals in order to make more money from tourism. In April, a CBC analysis showed that roughly 1 in every 50 private homes was being used as an Airbnb rental.

The rental market has become so bad due to this that it's actually better for people to just buy homes. Unfortunately, that drives demand higher, and with that comes higher prices.

"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."

Tourism is still a major driver in PEI's economy, so it's unlikely that the Airbnb issue will go away any time soon.

As demand for houses on the island continues to grow, and more people look for cheaper places to live, PEI's houses could just get more and more expensive.

Disclaimer: Cover photo used for illustrative purposes only.

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