Ontario is cultivating an increasingly rental-centric market.
The provincial government's initiatives to accelerate purpose-built rental housing starts, which include tax rebates and streamlined construction processes, are signalling a commitment to meeting housing demands head-on (along with federal funding).
“In recent years, purpose-built rentals have constituted a larger share of apartments breaking ground, averaging 42% in 2023,” according to the CMHC’s Spring 2024 Housing Supply Report. Edmonton had the highest share of rentals among new constructions at 80%. “In Toronto, where condominium apartments still dominate, the rental share increased to over a quarter.”
The strategic shift makes sense considering Ontario’s goal of constructing 1.5 million homes by 2031. Multifamily rental developments are a more efficient solution compared to single-family homes for sale.
But the emphasis on purpose-built rentals is not only a response to the housing shortage – there is also the growing appeal of renting over homeownership to consider.
Demand for rentals is strong, as demonstrated by record-high rent price growth (8.0%) and a record-low vacancy rate (1.5%) for purpose-built rentals in 2023.
This demand is partly driven by a scarcity of affordable homes for sale, reflected in declining homeownership rates nationally and in Ontario.
The question remains: if homes become more affordable in the future, will people rush to buy, or are changing lifestyle preferences enough to keep the rental market strong?
Only time will tell. For now, Ontario’s focus on purpose-built rentals ensures a thriving rental market for the foreseeable future.
More rental market headlines
Averton enters Alberta and Ontario purpose-built rental market – Storeys
Could mass timber construction help ease the housing crisis? – PayProp blog
Ontario bill aims to speed up stalled housing developments, boost student housing – Toronto Star
