Toronto Multifamily Market Report
Rising Interest Rates Push Households to Rental Market;
Population Growth Favours Apartments
Rent returns to pre-pandemic growth rate. After setbacks from the omicron variant in the first quarter of 2022, restrictions have almost completely been lifted in the GTA. The combination of retail openings and the beginning of return-to-office bodes well for the multifamily market. Additionally, with the Bank of Canada continuing its fight against inflation, the rising interest rate environment has further increased demand for apartment rentals as home affordability is becoming even more challenging, with the average benchmark price eclipsing $1.5 million earlier this year. The long-term forecast for the multifamily market is promising, as fundamentals are strengthening. Vacancy is beginning to decrease, and rent growth is estimated to be 5.5 per cent by year-end, numbers similar to the years leading up to the pandemic. For new builds and properties experiencing high turnover, this pace of growth is tied to rising costs, making multifamily a hedge for inflationary pressures and an attractive investment option.