Garry Marr: Are we building too many apartments now?

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomeReal EstateGarry Marr: Are we building too many apartments now?Rents keep falling and developers are looking to cut costs as affordability remains challengingLast updated 20 minutes ago A large residential apartment block being built by Drewlo just off of Bradley Avenue, east of Highbury in London, Ont., on Nov. 21, 2025. Photo by Mike Hensen/The London Free Press filesCanada’s housing problem for decades has been a lack of apartments, leading to low vacancy rates. And developers were reluctant to build, especially in provinces with rent control.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountTimes have changed since the national purpose-built rental vacancy rate dipped to 1.5 per cent in 2023. In fact, a panel of real estate executives at the Canadian Apartment Investment Conference this week debated whether Canada is building almost too many units now.“With all this new supply coming to especially Vancouver and Toronto, are we headed towards an oversupply situation?” asked Cynthia Jagger, executive vice-president of capital markets at real estate company CBRE Canada.SUBSCRIBER EXCLUSIVE: FP West: Energy Insider brings you behind the oilpatch’s closed doors with exclusive insights from insiders every Wednesday morning.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of FP West: Energy Insider will soon be in your inbox.We encountered an issue signing you up. Please try againHer question comes at a time of unprecedented new supply, some of it driven by a moribund condominium market that has seen developers convert proposed projects into rental towers after investors pulled out of high-rise units.The numbers are dramatic: Canada Mortgage and Housing Corp. reports that 122,295 purpose-built new rentals broke ground in 2025. Construction has only escalated, jumping from 95,852 in 2024 and 81,134 the year before that.A decade earlier, the country produced only 35,176 rental units in 2015, which was higher than 6,531 in 1998. CMHC stats only go back to 1990, but the 1980s are not described as a period of high rental stock, with some developers blaming tax changes for a reluctance to build.The upside to all the recent building is that the national vacancy rate has finally started to climb, hitting 3.1 per cent for purpose-built rental apartments at the end of 2025, but CMHC still says affordability is a challenge in some markets.Rent control is like putting a lid on a boiling pot. It’s very good for noise and not very good for pressure. It will be a big mistake.Benjamin Tal, deputy chief economist at the Canadian Imperial Bank of Commerce, kicked off the conference with a presentation in which he assailed the province of Manitoba for revisiting rent control at a time when supply is correcting the market.“This is crazy; we have been through this game before,” said Tal. “Rent control is like putting a lid on a boiling pot. It’s very good for noise and not very good for pressure. It will be a big mistake.”Manitoba apartments are exempt from rent control at a certain rate; the province is raising the monthly rent exemption threshold from $1,670 to $2,000 effective Jan. 1, 2027.Average asking rents in Manitoba reached $1,643 in August, down 0.3 per cent from a year ago, according to Rentals.ca. The average in-place rate has climbed from $1,163 per month at the end of 2022 to $1,358 in the province, according to CMHC’s latest data.“The good news is when I talk to Ontario, Quebec or B.C., nobody is talking about rent control. We are moving in the right direction on rental construction,” said Tal.It’s a bit of a bloodbath there.The question may be whether supply will start to fall. The new norm in the sector is uncertainty as developers try to figure out what to do with their land, according to Greg Jones, president of SkyDev, a Guelph, Ont.-based real estate company in the Skyline Group of Companies.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.“Condo developers, trying to figure out what to do, are scratching their heads,” said Jones, adding that projects are going to rental to avoid receivership. “It’s a bit of a bloodbath there.” The company, however, is continuing to build rentals, he said. “Skyline has a long history in rentals, and we’ve been building rentals long before this all happened. And we’re going to continue to do that.”The upside of a condo slowdown is that land prices have come down, and so have construction prices, and municipalities are also lowering some of their taxes and charges.“Apartments are generally recession-proof. Somebody loses their home and they need a place to live; they are going to rent,” said Jones. “The trick is to get a low enough cost base to get something that someone can afford to rent.”The problem for rental developers could be a market where asking rents keep falling. Rentals.ca reported that the average asking rent in Canada last month was $2,035, down 4.8 per cent from a year ago. It was the 23rd consecutive month of annual rent decreases and the steepest pace since March.And specific locations in Canada have particular challenges.Rising costs have created a more focused approach to where his company builds, said Chad Davidson, chief operating officer of Kelowna, B.C.-based Traine Construction and Development.“What it takes to get a project off the ground in B.C. right now is significantly more effort than, say, what we’re finding in Southwest Ontario,” said Davidson, adding that in British Columbia, development charges have not come down as much as in some municipalities in Ontario.Affordability is still the number one issue for residents, said Kellie Speakman, vice-president of multifamily with real estate company Jones Lang LaSalle Inc., or JLL. Still, people will pay more rent if they see the value, she said.“We got really attached to the bright, shiny amenities. And listen, I would love to live in a building that had a wine vending machine, but I wouldn’t necessarily pay more for it,” Speakman said, with a laugh. “One of the things that I’m also seeing is there’s a lot more attention now to suite layouts. It doesn’t matter what incentives you give; if it’s not a good floor plan, people won’t rent it.”Affordable is just not that affordable.Condo developers should get some credit for bringing innovation to highrises that tenants see as basic needs, said Sean Ingraham, executive vice-president of property operations at FirstService Residential in B.C. While some condos are being converted en masse to rentals, investor-owned suites have often ended up in the rental market. For instance, “If you don’t have a dog park right now in your project, you know you’re going to lose to someone that does,” said Ingraham.Speakman said competition continues to heat up for renters, including an older demographic of seniors moving into rentals.“You have to be really dynamic in your approach,” she said. “Residents are looking more for services that are going to make their life easier.”Ingraham said the market in Canada has become segregated and an oversupply in Vancouver and Toronto may apply only to a niche part of the market, and not necessarily in housing people need.“There is not an oversupply of affordable housing,” he said, referencing a recent project that had tenants making up to $90,000 annually where rents will be in the $3.50 to $3.75 per square foot range. “Affordable is just not that affordable.”Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. 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