“Right now the number of (purpose built rentals) will continue to be overwhelmed by the number of condo acquisitions and rentals,” Scott Chandler, senior vice president, advisory and investments sales for Colliers International, told Canadian Real Estate Wealth. “It’s a small segment that really isn’t growing as fast as condo investment.
“It’s still early days to be worrying.”
In Toronto, one of the country’s hottest condo markets, purpose-built rental construction increased to a 25-year high of 3,476 units last year; double the national annual average since 1990.
Still, condo rentals also saw a boom last year.
According to Urbanation’s Q4 statistics, the number of condo apartments rented through the MLS system last year in the GTA spiked 19%, reaching 27,166. That trend picked up steam to close out the year, as well. Total lease volume in the fourth quarter increased 26% year-over-year to 5,628 units.
For now it seems condo investors can continue to rely on strong rental prospects, especially with Ontario’s job creation – much of which has centred in Toronto – as well as continued immigration to the Hog Town.
Ontario added 23,000 jobs in December.
Toronto is expected to reach a population of 9.4 million by 2041.
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Renewed interest in purpose-built rental apartments may scare off potential condo investors but one industry veteran argues those fears are overblown.