21
Rental apartment completions in the Greater Toronto & Hamilton Area (GTHA) are expected to exceed condo completions for the first time in a very long time starting in 2028. But what does this mean for the overall market, and is it actually going to be enough new housing? Let's look at some of the numbers.
Last year, the GTHA recorded 29,671 new condo completions. This was some sort of a record. This year, condo completions are projected to total around 31,396 homes. Even higher. But then completions start to fall off, with 17,487 homes scheduled for completion in 2026. By 2029, this number is expected to be close to 1,000. So let's call it zero for argument's sake.
If we are to crudely assume that 50% of these new condominiums ultimately make it to the secondary condo rental market, then we are expecting nearly 16,000 condo rentals this year, just under 9,000 condo rentals in 2026, and ultimately no new condo rentals by around 2029 (or some number close to it).
Now let's consider the purpose-built rental side of the equation.
The 10-year average for purpose-built rental apartment starts in the GTHA is only 2,819 homes. This is a far cry from the volume of rental housing that we delivered in the 60s and 70s. Of course, with the new condominium market largely shut off, there's renewed interest in building purpose-built rentals.
In 2024, purpose-built rental apartment completions totalled 5,537 homes. And in the first half of this year, 3,156 homes reached the occupancy stage. Extrapolating out, I'm guessing that puts us somewhere around 6,000 new purpose-built rental apartment homes by the end of 2025.
If we pause and think about only 2025, we're on track to deliver roughly 37,000 new condo/rental apartments and ~22,000 new rental homes (again assuming 50% of the new condominiums become secondary rentals). I view this as our peak supply year for this cycle.
There's a lot of talk about a "record" number of purpose-built rental apartments now under construction, and while it is true that the numbers are elevated compared to the latest 10-year average, it is not a long-term record compared to the 60s and 70s and, more importantly, it is not enough to offset our dwindling new condominium supply.
Even if purpose-built rental completions spiked to 8,000 or even 10,000 new homes next year, we are still going to see a drop in new rentals and new housing overall in the GTHA. 2026 is the turning point year where new supply turns south. And it's going to keep going south until probably 2029, which is when I believe we will see supply bottom out.
Nothing in this post should be construed as investment or development advice, but here's the way I'm thinking about it:
2025: ~37,000 new condominium/apartment homes (peak supply year resulting from the pandemic boom)
2026: ~25,000 new homes (supply begins its decline)
2027: ~18,000 new homes
2028: ~10,000 to 13,000 new homes
2029: ~8,000 to 10,000 new homes (supply bottom)
I have no idea what will happen with interest rates, immigration, investor sentiment, and the countless other factors that impact a housing market, but even if things started to turn around next year, it would be mostly impossible to avoid the housing supply bottom that I believe we have coming in 2029. Buildings take a long time to build.
Conclusion: I think that 2026 will prove to be an excellent year to buy assets (land, unsold inventory, IPP, and so on), and that 2028 onward will be an excellent time to be delivering new homes. By then, we should be dramatically undersupplying the market. It doesn't feel that way today, but eventually the bill from our frozen development market will come due.
Cover photo by Adam Vradenburg on Unsplash
Yesterday morning, we did a day trip to Monaco. The main thing I wanted to see was Le Renzo (which is a project I have written about before). Designed by Renzo Piano Building Workshop, it is among the most expensive residential buildings in the world. Condominiums have reportedly sold for as high as €120,000 per square meter (or about €11,148 per square foot).
Before the trip, I emailed the district's PR contact to see if we could get a tour inside. Unfortunately, it's August in Europe, and they told me that nobody from the development team would be around to take us through. So we ended up just walking the perimeter. Here is a photo of the project's north elevation, facing inland.
Here's the south side facing the sea:
And here's a photo of its western edge, including the building's outdoor pool amenity:
The -1 level is boat slips and retail, some of which are still in the process of opening. The fact that they placed the retail where they did stood out to me, because it feels akin to second-floor retail — meaning, it only works in certain places and under certain conditions. Maybe this is one of them.
The ground plane — or at least the level that connects inland — is visually open on all sides, except for the elevator cores and exit stairs coming down from the buildings. This gives you a clear view of the Mediterranean as you approach the district and makes the entire area feel publicly accessible. It's also meant to evoke the image of ships sitting in a dry dock.
We didn't stay in Monaco very long, but this project was the highlight for me. I would have really loved the opportunity to tour inside and get closer to its details.
Leaving Monaco requires some maneuvering if you didn't drive or take the train (which we didn't). Uber is banned within the principality. You can get dropped off in an Uber, but you can't request a car once you're there. This is what you'll see if you open up the app and try:
We were also told that they're very strict about this. If, for example, you get dropped off in an Uber and then try to go off-app for your return, the Uber driver runs the risk of a heavy fine and having their car confiscated for a week. So many drivers don't want to do this unless you're willing to compensate them for the risk.
What you instead need to do is walk to the Monaco-France border, which usually isn't far given the country has a total land area of around 2 square kilometers. As soon as the GPS on your phone signals that you're in France rather than Monaco, cars reappear in the app. And from my experience, the geofencing is accurate within a few meters. It was pretty neat.
In the future, I think a better option might be to road bike over. I saw a number of people doing that yesterday and, boy, it looked like fun.
Urbanation just released its Q2-2025 condominium market survey results for the Greater Toronto & Hamilton Area. The results are as expected: new home sales are slow (like, 91% below the 10-year average) and unsold inventory is rising. But what I'm most interested in is trying to guess the future.
Urbanation expects a total of 17,117 condominium homes to complete in the second half of this year, which would bring total completions for 2025 to 31,422 homes (which is an elevated number). Completions in 2026 are then expected to drop to a more "historically normal level" of 18,037 units.
At the same time, there are 64,623 condominium homes under construction as of Q2-2025. I take this to mean that, once the above 17,117 homes complete in the second half of this year, there will be at least 47,506 new homes still under construction as we start 2026.
If we do end up completing 18,037 units next year, and ignoring any new starts, that will leave just under 30k units under construction into 2027. If completions remain at a similar level after this, we could then be close to building our way through this condominium pipeline by the end of 2027.
Of course, this says nothing about actual absorption. It's one thing to build a new home, but it has to ultimately get filled. And right now, there are almost 2,500 unsold condominium apartments in newly completed projects across the region. This is a record high going back as far as 2005.
So it's hard to say. But my view continues to be that, by 2028, we should be on the other side of this market. In the meantime, if you're looking for a place to live in Toronto, I think you'd be hard pressed to find a better time to buy. Most people will be too scared, and that's the point.