According to AI study, the average rent in Montreal will treble by 2032
By employing a neural network AI, the research claims to improve prediction accuracy by 30% compared to traditional linear models.
According to AI-driven research conducted by Concordia University, renting a two-bedroom apartment in Montreal could cost, on average, $4,325 per month by 2032, marking a staggering 106% increase over nearly a decade. As of March 2023, the average rent for such an apartment was $2,100.
Erkan Yönder, an associate professor at the John Molson School of Business, utilized artificial intelligence to generate these projections, emphasizing the transparency and objectivity of the findings.
The AI model was trained on a variety of data sources, including the Canada Mortgage and Housing Corporation (CMHC), Statistics Canada, and federal immigration and population projections.
Yönder points out that the significant rise in rental costs is largely attributable to Canada’s immigration and housing policies being misaligned. He notes, “Every year we bring new people to Canada and give a shock to the housing demand.
We need to be able to provide an equal shock to the supply to stabilize the cost of rent.” He stresses that this is a pressing issue affecting all Canadians.
For instance, in 2023, the research revealed over 1.2 million new Canadians were added, while only about 200,000 new housing units were created.
Yönder suggests that the rate of new home construction in Canada needs to increase by four to ten times to effectively address the housing demand.
The study, titled “AI-Driven Insights into Key Factors Contributing to Rental Growth Across Canada,” was commissioned by the private equity firm Equiton Research Fund.
By employing a neural network AI, the research claims to improve prediction accuracy by 30% compared to traditional linear models.
The findings also forecast significant rental increases in other major Canadian cities. For example, in Toronto, the cost of renting a two-bedroom apartment is projected to rise from $3,250 in 2023 to $5,600 by 2032.
In Vancouver, the average rent is expected to surge from $3,450 to $7,750 over the same period.
