Canada’s housing market has long grappled with affordability and supply shortages, but a promising trend is emerging: the resurgence of purpose-built rental construction. According to RBC Economist Rachel Battaglia, rental construction is experiencing a “renaissance,” with completions and new starts on the rise thanks to government incentives and growing demand for multi-unit housing.
Purpose-Built Rental: By the Numbers
Quadrupled Growth in a Decade: The number of purpose-built rental units started has nearly quadrupled over the past decade, with significant acceleration since 2018.
Annual Rental Housing Starts: Rental starts, including purpose-built rentals, condos, and secondary suites, averaged around 80,000 units per year in 2022 and 2023, nearly double the pre-pandemic average from 2015–2019.
Units per Population: Cities like Toronto and Vancouver have seen unit completions outpace population growth in recent quarters, providing much-needed relief to tight rental markets.
CMHC’s Q3 2024 financial report further highlights this trend:
206,157 Units Insured YTD: Of these, 64,979 multi-unit residential units were insured in Q3 alone, a 26% increase compared to Q3 2023.
Incentive-Driven Growth: CMHC’s MLI Select product, which rewards projects with long-term affordability, sustainability, and accessibility commitments, is driving demand for multi-unit insurance products.
Michel Tremblay, CMHC’s CFO and Senior VP, noted:
“Facilitating the construction of purpose-built rentals remains a key factor in tackling the country’s housing supply and affordability challenges.”
Why Purpose-Built Rentals Matter
After decades of limited rental construction, purpose-built rentals are playing a vital role in addressing Canada’s housing crisis. They provide stable, long-term housing options, particularly in urban centers where demand continues to rise. Unlike condos, which often serve investors or short-term occupants, purpose-built rentals are designed with long-term tenants in mind, offering predictable pricing and professionally managed units.
Goodland Equity Partners’ Perspective
At Goodland Equity Partners, we believe purpose-built rentals are not just a response to Canada’s housing crisis—they’re an investment in sustainable, community-focused living. Here’s how we see the opportunities:
Targeting Growing Demand:
As rental supply ramps up, there’s a clear opportunity for private equity to support purpose-built developments that align with both affordability and quality standards.
Leveraging Incentives:
Programs like CMHC’s MLI Select provide a framework for sustainable development. By committing to affordability, sustainability, and accessibility, developers can unlock insurance incentives while delivering long-term value to communities.
Addressing Market Needs:
With population growth continuing in cities like Toronto and Vancouver, purpose-built rentals offer a reliable housing solution for urban professionals, families, and students alike.
Sustainability and Impact:
Our focus at Goodland is on projects that not only meet housing demand but also contribute to environmentally responsible development. These efforts align with evolving market trends and government priorities.
Building for Canada’s Future
As purpose-built rentals continue their resurgence, they provide a critical avenue for addressing Canada’s housing supply and affordability challenges. With supportive government programs and growing investor interest, this sector represents a significant opportunity to create meaningful, sustainable impact.
At Goodland Equity Partners, we are proud to contribute to this momentum through strategic investments in purpose-built rental projects that prioritize affordability, quality, and sustainability. Together, we can build housing that meets the needs of today and lays the foundation for thriving communities tomorrow.
Interested in learning how you can participate in purpose-built rental investments? Contact Goodland Equity Partners to explore our current opportunities.
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