7 reasons short-term rentals are gaining popularity in Canada

Keeping in mind the flexible and diversified travel needs worldwide, the business of short-term rental has been growing in Canada. This goes on to prove customer demand for personalized and more cost-effective accommodations. Royal York Property Management is one of Canada's leading property management and rental companies. With a managed portfolio in excess of $10.1 billion consisting of more than 22,000 properties, it brings to bear an in-depth understanding of these changing dynamics. Here are seven reasons why short-term rentals represent such a large market in Canada, with the current statistics for 2024.

Increased Flexibility  

Modern-day travelers prefer flexibility in terms of accommodation, and that is just what short-term rentals offer. Most travelers are searching for a place to stay over the weekend, spend a few nights while attending a business event, or just go on a longer stay; the freedom to choose from various rental periods is the best. According to recent surveys, more than 60% of Canadian travelers prefer short-term rentals because this arrangement allows them to customize their stay duration according to their needs. This is a trend likely to continue and dictate the pace further, as more people traveling prefer to have a unique experience away from conventional hotels.

Affordability  

Travelers on a budget can often get short-term rentals for less than the price of a hotel. For families or groups, the savings are even greater, and if residents can cook, it reduces the overall cost. In fact, booking an average short-term rental in a major Canadian city is still relatively inexpensive in 2024, costing around CAD 150–200 per night. This is one reason that makes the affordability of short-term rentals attractive, since it allows travelers to stay in more spacious and homely environments without necessarily having to break the bank.

Unique Experiences  

Modern-day travelers prize authentic, one-of-a-kind experiences. With short-term rentals, guests can embed themselves in the neighborhoods and get a more real experience than the usual areas and places that dot a tourist's itinerary. Airbnb has reported growth in bookings for unique properties such as converted lofts, heritage homes, and lakeside cabins. Travelers appreciate this local experience more, which fosters a deeper sense of connection with the destination. It is this desire for something new and authentic in their accommodations that can very much be the case for short-term rentals.

Eco-Friendly Options  

The traveling community is increasingly concerned about health issues and environmentally responsible behavior. Therefore, many travelers are now actively looking for eco-friendly accommodation. As demand increases, short-term rentals gear up to meet those needs. Property owners are reforming themselves: energy-efficient appliances, recycling programs, and environmentally sensitive cleaning products. The trend only goes to affirm the greater calls for responsible travel from across the world. With the majority of the population highly sensitized toward environmental conservation in Canada, the availability of rental options within a sustainable niche draws responsible tenants to the sector, further enhancing its prospects for growth.

Airbnb and Other Platforms  

Online platforms have disrupted the short-term rental market. Airbnb, Vrbo, and Booking.com are leaders in the space, offering an impressive portfolio of properties that would satisfy even the most exquisite tastes. Only Airbnb hosts a database with over 100,000 listings within Canada, with the average listing coming in at CAD 6,000 per host annually. Most of these platforms provide easy access and options for travelers to find accommodations according to their special needs. Their inbuilt user-friendly interfaces and far-reaching reach continue to power the popularity of short-term rentals.

Supply Deficit  

Despite seasonal trends, structural deficits in supply exist across major markets. Low inventory keeps home prices out of reach for many Canadians; therefore, demand for rental properties remains powerful. Considering supply and demand, there is a great gap between them in cities like Toronto, for example, looking at housing affordability, which is a big problem. Short-term rentals are convenient for property owners and tenants with flexibility, thus helping to close the real supply and demand gap in the housing market.

Interest Rate Cuts  

The effect of changes in interest rates is somewhat seen within the rental market. Potential rate cuts in 2024 may ease the pressure on rent prices, making it more feasible for tenants to find affordable accommodations. As first-time home buyers transition to ownership, some rental demand may shift. However, the central issue of affordability is nonetheless retained, and in the short term, rentals become alluring to people seeking flexible and cost-effective living arrangements.

Challenges that Short-term Rentals Create    

While short-term rentals bring in enormous benefits as far as owners are concerned, they still have impacts on long-term rental prices. The remarkable upsurge in Airbnb and related platforms has contributed to housing affordability challenges in some cities. Researchers point out that there is a relationship between increased activity on Airbnb and higher long-term rental prices within cities like Burlington, Toronto, and Vancouver. Policymakers are wrestling with the issue of how most of the benefits from short-term rentals can be garnered while maintaining affordable housing choices for residents. This debate is part of the evolving face of the rental market in Canada.

In a nutshell, flexibility, affordability, and uniqueness sum it all up for what makes short-term rentals so popular within Canada. However, it is crucial for policymakers to address housing affordability concerns to maintain a balanced and fair market. Royal York Property Management continues to help both owners and tenants alike by expertly guiding them through these dynamics with professional services. Equipped and flexible, landlords can understand the newly developing potential of short-term rentals and help develop a fair and sustainable Canadian housing market. For more information on Royal York Property Management and our services, visit: royalyorkpropertymanagement.ca