TORONTO -- A real estate listing site shows the average housing rental price in Canada has increased by 4.3 per cent year-over-year, and one expert says short-term rentals is one of the reasons why.

The January 2020 report collected data from the rental listings posted to their site, which includes 30 cities and more than 12,000 rental listings of all property types. The national average rent is $1,854 per month and of Canada’s largest cities, Toronto, Vancouver and Montreal saw the highest increases. Out of the three, Montreal renters had the highest increase at a 25 per cent rate hike across all property types (from an average of $1,286 per month to $1,611).

According to a University of McGill study released in 2019, Airbnb likely removed 31,100 units from the long-term rental market. Since the report, many cities have been advocating for stricter regulations when it comes to home-sharing. Ontario’s provincial tribunal approved a bylaw in 2019 for Toronto that would limit hosts to renting out their entire home for a maximum of 180 nights per year.

Matt Danison, CEO of spoke to Jan. 31 about the report and how short-term rentals continue to be a factor.

“Short-term rentals have had a direct impact on the housing supply and prices have gone up ... The regulations have been this snowball effect and for Toronto it can open up around 5,000 available units,” Danison said.

David Wachsmuth, professor of urban planning at McGill University, said although regulations are being introduced the short-term rental market has not slowed down.

“In the three big cities [Toronto, Montreal, Vancouver] you can see some progress but the flip-side of that issue is that it is hitting medium-sized and smaller communities,” said Wachsmuth in a telephone interview on Tuesday.

Communities such as Victoria, Halifax and Charlottetown are among those affected by the shortage of rental units, which has created a challenge for their economies as they rely heavily on tourism. Wachsmuth says home-sharing businesses bring a rise in tourists that while benefits the economy, doesn’t aid in the rental housing shortage.

“They don’t want to do anything that’s going to cut off the demand for visitors to come support their economy. Some of these smaller places, understandably, are trying to balance this issue in a way that hasn’t been as much of a problem for bigger cities,” he said.

Since the rise of short-term rentals companies such as Airbnb, regulating the industry has been the subject of debate in municipalities across Canada. Calgary implemented a new policy in January 2020, that requires hosts to obtain a business licence before making their units available for short-term rental.

Wachsmuth says these regulations have been trying to crack down on landlords who are renting out properties through Airbnb and other home-sharing businesses that are solely used for short-term rentals; rather than those who only occasionally rent out their own homes.

“There's been a shift to a focus on the things that municipalities and provinces have a good chance of figuring out, which is are you [landlords] running a short-term rental out of your home or is it a commercial operation that isn’t your principal residence … If it’s not your home we want that back on the market,” Wachsmuth said.

The report also includes predictions of what Canadians can expect in the property rentals market in 2020. Aside from more short-term rental regulations, the report expects the rise of millennials past their 30s living with roommates or family, more vacancy taxes, and more rental apartments being built with smaller units.