Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
As most of you know, the Toronto housing market has shifted its attention from condominiums to rentals. This is out of necessity. According to the Toronto Regional Real Estate Board, the GTA saw approximately 71,392 condominium apartments leased (counting only those leased through MLS) in 2025.
Quarter | Units Leased | Y-o-Y Change |
Q1 2025 | 14,797 | +16.7% |
Q2 2025 | 20,417 | +16.6% |
Q3 2025 | 22,491 | +20.2% |
Q4 2025 | 13,687 | +16.0% |
Total | 71,392 |
These increases are a result of having no other option. As demand has waned for new condominiums, a greater number of investors have decided to rent out their new condos. If you're a tenant looking for a new home to rent, this has been good news.
At the same time, Urbanation just reported that a total of 9,821 purpose-built rental apartments started construction in 2025, representing a 42% increase from the year prior. This is the highest annual total since the 1970s.
At year-end, this resulted in a total of 27,815 purpose-built rental apartments under construction in the Greater Toronto & Hamilton Area. And like individual condominium buyers, developers are doing this because there is, in most cases, no other option.
But while these may seem like large numbers, it's important to keep in mind that new condominium completions are currently on a downtrend toward zero completions in the coming years (for all intents and purposes).
Even with rental starts approaching 10,000 units per year, it's not enough to replace the condominium supply that is starting to evaporate. Based on current sales and starts, 2029 looks to be the year where we'll hit our housing supply bottom.
Toronto's East Bayfront has changed dramatically over the last twenty years. Remember when we used to complain that the waterfront was under-utilized?
Here's what it looked like circa 2005 (photo via Waterfront Toronto):
As a general rule, building a new building is easier than trying to do surgery on an existing one, because you never know exactly what you're going to find when you start the latter. But there are instances where surgery is necessary.
According to Bloomberg, developers in London are becoming increasingly interested in the airspace above existing buildings, and it supposedly started because of some policy changes:
In 2020, then housing minister Robert Jenrick introduced reforms that relaxed rules to add airspace builds above existing buildings. Owners can now construct additional residential stories to either expand their own dwelling or to create new units altogether without going through full planning permissions, which are often a long and costly process. This was part of a broader set of reforms to boost housing supply, and the current Labour government has not shelved these changes.
Here's an example site listed for £150,000:
The site currently comprises the roof and airspace above a 3-storey mixed-use residential-led block (Block B) within The Glassworks Development.
The existing development was constructed in 2017 and comprises 23 residential apartments plus ground floor commercial space, all of which are sold off on long leases.
I had an old boss who was very interested in this idea. For him, it was "free" land and a way to further extract value from an existing real estate portfolio. Of course, it's also a way to build new homes in already built-up cities.
As most of you know, the Toronto housing market has shifted its attention from condominiums to rentals. This is out of necessity. According to the Toronto Regional Real Estate Board, the GTA saw approximately 71,392 condominium apartments leased (counting only those leased through MLS) in 2025.
Quarter | Units Leased | Y-o-Y Change |
Q1 2025 | 14,797 | +16.7% |
Q2 2025 | 20,417 | +16.6% |
Q3 2025 | 22,491 | +20.2% |
Q4 2025 | 13,687 | +16.0% |
Total | 71,392 |
These increases are a result of having no other option. As demand has waned for new condominiums, a greater number of investors have decided to rent out their new condos. If you're a tenant looking for a new home to rent, this has been good news.
At the same time, Urbanation just reported that a total of 9,821 purpose-built rental apartments started construction in 2025, representing a 42% increase from the year prior. This is the highest annual total since the 1970s.
At year-end, this resulted in a total of 27,815 purpose-built rental apartments under construction in the Greater Toronto & Hamilton Area. And like individual condominium buyers, developers are doing this because there is, in most cases, no other option.
But while these may seem like large numbers, it's important to keep in mind that new condominium completions are currently on a downtrend toward zero completions in the coming years (for all intents and purposes).
Even with rental starts approaching 10,000 units per year, it's not enough to replace the condominium supply that is starting to evaporate. Based on current sales and starts, 2029 looks to be the year where we'll hit our housing supply bottom.
Toronto's East Bayfront has changed dramatically over the last twenty years. Remember when we used to complain that the waterfront was under-utilized?
Here's what it looked like circa 2005 (photo via Waterfront Toronto):
As a general rule, building a new building is easier than trying to do surgery on an existing one, because you never know exactly what you're going to find when you start the latter. But there are instances where surgery is necessary.
According to Bloomberg, developers in London are becoming increasingly interested in the airspace above existing buildings, and it supposedly started because of some policy changes:
In 2020, then housing minister Robert Jenrick introduced reforms that relaxed rules to add airspace builds above existing buildings. Owners can now construct additional residential stories to either expand their own dwelling or to create new units altogether without going through full planning permissions, which are often a long and costly process. This was part of a broader set of reforms to boost housing supply, and the current Labour government has not shelved these changes.
Here's an example site listed for £150,000:
The site currently comprises the roof and airspace above a 3-storey mixed-use residential-led block (Block B) within The Glassworks Development.
The existing development was constructed in 2017 and comprises 23 residential apartments plus ground floor commercial space, all of which are sold off on long leases.
I had an old boss who was very interested in this idea. For him, it was "free" land and a way to further extract value from an existing real estate portfolio. Of course, it's also a way to build new homes in already built-up cities.
And here's what it looks like today:
The waterfront has, in my opinion, become one of the nicest neighbourhoods in the city. I'm bullish on this part of Toronto. But it's not done yet.
One key piece of infrastructure that was just completed is the landfilling of a part of the Parliament Slip.
If you go back to the previous aerial photo, you'll see that the water's edge now runs parallel to Queens Quay East in this section.
This was an important piece of city-building work because it will allow Queens Quay to continue eastward to Cherry Street, establishing a new city grid that can be used for transit and future development in the area.
If you'd like to see what it takes to landfill part of Lake Ontario, below is a time-lapse video, also from Waterfront Toronto.
If you can't see it embedded in the post, click here.
Cover photo from Waterfront Toronto
But these are not simple builds. Can the existing structure and foundations support additional levels? How do you modify the existing elevator(s) while the building below remains occupied? How do you do the mechanical tie-ins without impacting the suite(s) below?
All of this makes me wonder how feasible it will be for London to build 180,000 new homes in this way. If it can, that would be a great accomplishment, and one that other cities should aim to emulate. But regardless, I'd love to get under the hood of one of these projects.
Cover photo by Travis Fish on Unsplash
And here's what it looks like today:
The waterfront has, in my opinion, become one of the nicest neighbourhoods in the city. I'm bullish on this part of Toronto. But it's not done yet.
One key piece of infrastructure that was just completed is the landfilling of a part of the Parliament Slip.
If you go back to the previous aerial photo, you'll see that the water's edge now runs parallel to Queens Quay East in this section.
This was an important piece of city-building work because it will allow Queens Quay to continue eastward to Cherry Street, establishing a new city grid that can be used for transit and future development in the area.
If you'd like to see what it takes to landfill part of Lake Ontario, below is a time-lapse video, also from Waterfront Toronto.
If you can't see it embedded in the post, click here.
Cover photo from Waterfront Toronto
But these are not simple builds. Can the existing structure and foundations support additional levels? How do you modify the existing elevator(s) while the building below remains occupied? How do you do the mechanical tie-ins without impacting the suite(s) below?
All of this makes me wonder how feasible it will be for London to build 180,000 new homes in this way. If it can, that would be a great accomplishment, and one that other cities should aim to emulate. But regardless, I'd love to get under the hood of one of these projects.
Cover photo by Travis Fish on Unsplash
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