Market Report
Toronto Multifamily Investment Forecast
2026 Investment Forecast
Public Measures to Support Supply Growth
Despite Softening Conditions
Rental market in readjustment phase. Alongside a sharp deceleration in population growth last year, Toronto’s rental market saw a surge in secondary rental supply. As condo prices fell, an increasing number of financially stressed condo owners rented out their units at discounted rates to cover mortgage costs. This influx of options prompted many purpose-built operators to offer incentives to attract and retain tenants. In 2026, muted resident gains and ongoing competition from the condo market are expected to continue posing headwinds for the multifamily sector. Even so, with lower interest rates and a potential improvement in trade, Toronto’s economy could regain momentum in the second half of 2026. This should help firm rental demand, keeping the apartment vacancy rate low at approximately 3.4 per cent. Over the longer horizon, Toronto’s rental supply is poised to increase meaningfully as various municipal, provincial and federal initiatives take effect. These measures range from building affordable homes on public land to improving infrastructure to address construction bottlenecks. This concerted effort will help address the metro’s structural housing shortage and, over time, could help restore housing affordability.
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