Toronto-area real estate broker John Pasalis doesn’t see any relief in sight for renters in Canada’s largest housing market.

In an interview Tuesday, Pasalis, the president of Realosophy Realty, said that the combination of tight rental market conditions and rising immigration rates should keep upward pressure on rents in the near future.

“Rents are up 20 per cent year-over-year, so if we see some stability in [housing prices], we’re probably going to see a little more upward pressure on rents, if people can’t afford housing, they have to move somewhere, and that’s a reason rents have been rising,” he said.

Average condo rents have been rising at a double-digit pace, with a one-bedroom unit in the Greater Toronto Area hitting $2,269 in the second quarter, according to the Toronto Regional Real Estate Board. Two-bedroom units have also seen a precipitous increase, rising 15.2 per cent year-over-year to $2,979 over the same time period.

That has come amidst a sharp decline in listings – down about 30 per cent – and transactions, which have fallen 11.4 per cent from a year ago.

Pasalis said that even with that pronounced increase in rents, he doesn’t see many new prospective landlords dipping their toes into the market, given the increasing carrying costs of a property due to higher interest rates.

“It’s not a great time to be buying a rental property – right now, it’s still very expensive. The rental properties don’t make sense, at least not in the Toronto area, even with the higher rents at today’s higher interest rates,” he said.

“I think it’s a very challenging market for an investor, I think most investors that I’m seeing are just waiting on the sidelines, waiting to see if prices dip a little further, and we probably will have downward pressure on prices.”

While renters are feeling the pinch from the drum-tight market, and prospective homebuyers are sidelined by those higher rates and subsequent hurdle due to the tougher mortgage stress test, Pasalis said there’s no easy fix for affordability in the domestic housing market.

“We definitely need more supply. The challenge is policymakers have no mechanism to make builders build in a high interest rate, slow environment where people are very reluctant to buy pre-construction housing,” he said.

“We have to let prices adjust to this current higher-rate environment, see where they end up landing, and then we’ll eventually see builders put more supply on the market, but there’s not much they can do at the moment right now, unfortunately.”