Market Report
Toronto Multifamily Market Report
3Q 2024
Easing Demand and Uptick in Secondary
Supply to Provide Some Balance to Market
Supply measures to provide some relief to tight market. Starting in the late 1970s, builders switched focus away from purpose-built rentals due to rent control policies and the higher profitability offered by for-owned condominiums. Decades of underbuilding has now led to a supply-and-demand imbalance in Toronto’s multifamily sector. The metro’s vacancy rate hit 1.4 per cent in 2023, helping annual rent growth reach an all-time high of 10 per cent. Nevertheless, the combination of new government incentives and improving fundamentals has caused a significant uptick in purpose-built rental development, with the under-construction pipeline at its highest level on record as of the first quarter of 2024. For-owned condominiums — which act as a secondary source of rental supply — are also experiencing elevated levels of completions. While Toronto’s multifamily vacancy rate is forecast to hold well below equilibrium levels, these supply-side dynamics could help rebalance the market.
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