Toronto’s rental construction saw significant progress in recent years, reaching levels not seen since the 1990s. However, the number of purpose-built rentals under construction began to decline in March and April 2024, dropping from 18,300 units in February to around 17,280 by April. This slowdown is attributed to tougher market conditions, including higher interest rates and increased construction costs, which have led many builders to delay or re-evaluate their projects. Experts warn that fewer new starts now will result in fewer completions later, exacerbating the already tight rental market.
Despite government interventions aimed at boosting rental construction, such as the removal of HST on eligible projects, experts believe these measures will have limited impact until economic conditions improve and interest rates decrease. The current level of construction still falls short of meeting the expected rental demand over the coming decade. Housing experts suggest that additional government measures, like expanding HST waivers and reducing fees, could help stimulate more rental development to address the long-term housing needs in Toronto.
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Toronto’s rental construction was at its highest level since the 1990s. Why is it now slumping?
