SW Ontario Multifamily Market Report

Demographic tailwinds support property performance. Southwestern Ontario’s multifamily sector has experienced healthy demand in recent years. The metro’s vacancy rate fell 60 basis points to 1.7 per cent in 2022, helping annual rent growth surpass 7.0 per cent. This was due to a growing number of households being priced out of the Toronto market, coupled with the structural shift toward hybrid work, causing people to leave downtown cores for more suburban settings. Of the region’s population growth, which surpassed 2.0 per cent in 2022, roughly one-third was a result of intra-provincial migration. While on-site work has gained some momentum, causing a share of the population to relocate back to Toronto, historic immigration — along with the emergence of advanced manufacturing — is likely to continue to support healthy apartment demand over the coming years. The vacancy rate is expected to trend down once again in 2023, which will keep rent growth above the metro’s long-term average. However, an influx of new supply and a slowing economy may soften the rates of change when compared to last year.