More rental housing could be coming to Toronto
After years of building condos, developers in Toronto may be switching back to rental.
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After decades of condo dominance, Canada’s real estate market appears to be returning to rental.
However, it may be too early to tell if the trend applies to Toronto.
A report issued Tuesday by the Altus Group claims a third of all new apartment construction in Canada last year was purpose-built rental. The percentage hasn’t been that high since the mid-90s, said Altus economist Peter Norman.
“We’re seeing larger investors interested in bringing full purpose-built housing to market,” he said. “They’re looking for a steady income.”
In Toronto, 45 per cent of the population rents, but over the past two decades 95 per cent of new residential construction has been for the ownership market, said city planner Noreen Dunphy.
Much of the resulting demand has moved to the secondary condo rental market, but Dunphy says there’s been an “uptick of interest” from developers looking to build rental housing.
“We’re thrilled if developers are staying rental,” she said. “We could be at the beginning of a trend, but it’s too soon to tell if it’s going to last for more than a few years.”
There are a number of rental developments planned for Toronto – including the 1,000-unit redevelopment of Mirvish Village – but Dunphy remains only cautiously optimistic.
Many developers will “hedge their bets,” she said by also applying for condo licences, meaning any rental stock they create could be temporary.
“When do we count them? When they’re built,” she said.
Dunphy hopes more purpose-built rental does arrive in Toronto. The city’s vacancy rate has hovered around 1.7 per cent for years, and that makes it difficult for renters to find stable housing, she said.
“A city needs all kinds of rental at different price points,” she said.
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