Dear Urbaneer: Is There A Multiplex Boom Happening In Toronto Real Estate?

August 31, 2026

Welcome to this month’s installment of Dear Urbaneer, where I take on real estate questions from my inquisitive readers. This time, a reader is trying to make sense of data and headlines that proclaim a boom in multiplex development.

Dear Urbaneer:

I’ve been following the Toronto real estate market news, trying to get a read on market conditions and opportunities. I’ve seen stories that multiplex construction is booming in Toronto, while fewer large condo projects are getting underway. I’m looking for a little context around these headlines and numbers- as in, is this actually what is happening, and what impact does this have for the market, and for me as a buyer too?

Signed,

Making Sense of Multiplexes

Here is my reply:

Dear Multiplexes:

First, you are always well advised to dig deeper into data around real estate – because context is everything. In this case, the source of the data comes from CMHC’s Spring 2026 Housing Supply Report which noted

“Developers have shifted toward rental and smaller-unit projects. In the City of Toronto, rental unit starts exceeded condominium apartment starts. Overall, buildings with 3 to 5 units surpassed those with 100+ units for the first time”.

While one could interpret this to mean a multiplex boom in Toronto is underway, CMHC is quietly telling us that the number of condominiums starts with 100+ units is so depressed that two historically smaller housing markets, being purpose built rental housing starts and building starts with 3 to 5 units are now outperforming what has been driving our New Homes Market for over 2 decades. CMHC says this is because developers of 100+ condos have had to pivot to these housing types in order to stay open for business.

As long as housing is getting built, this isn’t necessarily bad, unless your measurement of success is based strictly on the number of units being delivered annually. A 2025 report called “Multiplex Monitoring Program” report (often referred to alongside the Expanding Multiplex Permissions: Sixplexes Citywide Study), prepared by Toronto City Planning and officially released to the Planning and Housing Committee in June 2025 indicated that it received 750 multiplex building permit applications between May 12, 2023 and November 4, 2024, which is more than triple the number of applications submitted between 2020 and 2022. Out of those 750 applications, 452 permits were issued and 108 projects were fully completed and inspected within that initial tracking window. The report highlighted that approximately three-quarters of these multiplexes were retrofits or conversions of existing single-family homes rather than entirely new ground-up construction. This is interesting data, because it reveals that it’s not the large-scale developers of 100+ units who are building multiplexes, given most of the projects are conversions rather than new builds which means their pivot is on purpose-built rentals.

I’m delighted multiplex development is growing and here to stay. All three levels of government have introduced massive regulatory shifts to eliminate exclusionary zoning in single-family neighbourhoods and lower costs for building “missing middle” multiplexes in Toronto. To call it a boom, in my humble opinion, is a bit of a reach. The multiplex – which by definition is a low-rise residential building containing between two and six independent living units under one roof – became permitted “as-of-right” city-wide in Toronto when the Zoning By-law amendment (Law 0474) went into effect immediately on May 12, 2023, followed by the Official Plan amendment (Law 0473) taking effect on June 14, 2023. Along with the as-of-right for Laneway Houses (June 2018) and Garden Suites (July 2022) on properties meeting specific criteria, these growing niche markets are certainly welcomed by me, but this new supply won’t fix our perpetual housing crisis.

Nevertheless, where a single family dwelling once stood, now a collection of households can nest, close to terra firma, in a shelter built to human scale, where opportunities to engage with neighbours and the surrounding established urban fabric is a short stroll away. Tenants are more likely to engage than if they rented a unit in a highrise simply because they’re more likely to run into each other. A group of friends or a multigenerational family can each hold title to their multiplex condominium units so cohousing isn’t constrained for lack of economic freedom. Each multiplex is only limited by how large it can be and the building and fire codes, otherwise it can be designed and constructed to suit.

In contrast, Toronto’s New Homes market—dominated by the pre-construction mid and high-rise condominium sector—is production-based housing built to expedite profit. Developing shelter at scale is such a mammoth undertaking to execute that the minutae consuming the End User sharing their vision of ‘home’ is exponentially annoying when the dozen speculative investors in it for the money silently nod hello white sending the deposit through a wire transfer.

The pre-construction condo market made a structural shift toward investor dominance around the late 1990s and early 2000s, after the Toronto real estate market recovered from the 1989 bubble that saw the New Homes and Resale Markets crater. Real estate values dropped upwards of 35% over a six year period and then flatlined for another four. Newly completed vacant condos were sold drastically discouted, sometime for as much as 50% less than peak value. The ten-year recovery – which I call The Lost Decade – saw the high down payments and brutal monthly interest costs common in 1989 relaxed with post-recession financing rules, including the federal government’s 1992 “First-Time Home Buyers’ Program” pilot become permanent in 1999, allowing a 5% down payment one could borrow tax-free from one’s RRSP instead of the previous minimum down payment of 10% cash. Interest rates also fell. In 1989 a five year fixed mortgage was 12%, and only 7.5% in 1999, The Progressive Conservative government introduced the Tenant Protection Act in 1997, which removed rent controls on any units built or first occupied after November 1, 1991, to stimuate new development. And the real estate market’s correction itself meant the average price of a property in 1999 was $228,372, which was $45,000 less than the 1989 sum at $273,698.

Toronto’s New Homes Market began accelerating into a heavy speculative boom after the 2007 collapse of the US subprime mortgage market spurned the global financial crisis, save for Canada with its strict regulations, conservative lending habits, and concentrated banking system. Canada’s stability – and perhaps the ease of snow washing and inadequate policy – made Toronto and Vancouver a magnet for foreign investment in the New Homes Market. eventually peaking to where individual and small-scale investors accounted for upwards of 70% to 80% of pre-construction condo sales throughout the 2010s and early 2020s.

The Toronto New Homes market hit its peak in Spring 2022 and started disintegrating when the Bank of Canada began increasing interest rates in an effort to control inflation. As I synthesize in my post on Interest Rates And The Toronto Real Estate Market in March 2022, the BoC increased the 0.25% prime rate 10 times by a total of 475 basis points, peaking at 5.0% in July 2023. The global speculators exited to the next hot market, while the local speculators hit pause to bandage their bleeding. The modest 2.8% cap rates for the preceding decade became negative carry for 52% of investors in 2022, increasing to 77% in 2023 and hitting over 80% by 2025 due to higher interest rates, rising common fees, and declining rents as the supply of rental condos flooded the market. Every property owner with an open variable mortgage were allowed to extend their amortization period to make their payments more manageable, as were homeowners renewing their mortgage. Lenders were making every effort to reduce the risk of default. The central bank held the rate at 5.0% for 11 months until June 2024, when a series of reductions brought the rate down to 3.75% by October 2024 and further down to 2.5% by September 2025. Meanwhile, end users who were seeking larger units with better space plans weren’t interested in the newly completed condo product despite the price reductions. Growth stalled as new projects were cancelled or converted to new rental housing, and attention shifted to multiplex housing.

According to market research firm Urbanation, Q1 and Q2 2026 saw zero new condo project openings due to a standoff between broke investors and struggling developers. The situation is a repeat – albeit exporential in magnitude- to the 1989 real estate bubble that popped whem the New Homes Market – predominantly comprising of new condominiums – and Resale Market collapsed in an Exhaustion Movement. I share my experience as a newly licensed realtor in my post When Dreams Of Domesticity Became Nightmares: A Recollection Of The 1989 Toronto Housing Market Crash.

Let’s look at some condo development stats too, pulled from the CMHC report:

“In Canada, in 2025 housing construction increased 6% year-over-year to 259,000 units. In almost all markets, activity exceeded the 10-year average. The notable exception was Toronto, where starts fell well below the historical average and reached the lowest per-capita level among the 7 large census metropolitan areas (CMAs).”

So- housing starts in Toronto fell to their lowest level since 2009 in 2025, with 18,986 apartment starts, including condos and rentals, compared with a 10-year average of 26,856.

This slowdown is most noticeable in condos. Condo presales have collapsed, according to CMHC, which attributes this to investors retreating from the market, while high material and financing costs have made it harder for developers to meet the presale thresholds required to secure construction financing.

The impact is that Toronto condo starts dropped to levels not seen since the 1990s. That’s significant in a city where condos dominated the new housing market for many years.

The most recent data from Urbantion suggests that, while new condo sales improved in Q2, they were 86% below the latest 10-year average for Q2 periods. The report indicates that nearly all the sales were newly completed condos, over presales, which dropped to 80% on an annual basis. It’s also been the slowest period of growth in three years, according to the report.

Furthermore, in Q1 of this year the standing condo inventory hit a record high, with 4,295 new condos completed but unsold as of Q1. This is double the level from a year ago and nearly five times higher than two years ago. Urbanation estimates there is 92 months of completed new condo supply on the market, which doesn’t fully account for units that were presold but the buyer failed to close. Additionally, 8,629 unsold new condos were under construction and slated for completion in the next 2 years. It’s the basic, but profound lesson in all economics: the exchange of goods. Supply and demand not only secure value, but also ensure the need for future supply.

The takeaway? Don’t mistake relative growth for absolute growth.

The real story isn’t that multiplex development is booming, but that this now as-of-right housing type is providing a missing-middle solution for End Users seeking a primary residence. Speculators and investors prioritized financial metrics, velocity, and capital appreciation over physical living conditions, which developers catered too because it was easier and more profitable, than accommodating the wishes, wants and needs of more risk averse (by virtue of not being speculators) End Users. This article by Equiton -a Canadian private equity and real estate investment firm- explains The Rise of End Users: How Toronto’s Condo Market Is Changing.

What Are The Factors Contributing To Growing Multiplex Popularity?

The rise of the multiplex isn’t necessarily at the expense of the condo’s decline, but support has shifted on numerous levels to support this kind of development, and demand has shifted too.

It’s important to remember that what lies at the heart of the growth of any housing type is demand. And there has long been a need for affordable housing for the missing middle in Toronto, made more prominent by the significant gap in pricing and availability between detached homes and condos. So buyers keep hunting for missing-middle housing, which is where multiplex development is headed.

Recognizing the demand and potential, Toronto has opened considerably more of the city to this type of housing.

I’ve followed the growth of multiplexes over the last few years. Check out these past posts: As-Of-Right Multiplexes Create Missing Middle Options For Toronto Real Estate, All Residential Properties In Toronto Can Now Become Four Units As-Of-Right, and Why Toronto And Its Residents Benefit From Building Multiplex Condos.

In short, zoning and bylaws have evolved over the last few years to permit various sizes of multiplexes, depending on location in the city, and multiplexes enjoy much more freedom under as-of-right governance than other housing types, supporting growth.

Meanwhile, the city has taken steps to make this type of development more attractive financially, including development charge waivers, relief on other fees, and federal and provincial tax breaks as well, making it easier, and in many ways more cost-effective, to develop multiplexes over large-scale developments.

It’s worth noting that heavy-handed processes, red tape, fees, and governance around housing development were blamed as obstacles to developing affordable housing when Toronto’s real estate market (including the condo market) was booming.

Beyond incentives and making it easier to build multiplexes for developers, the housing type aligns with numerous priorities for buyers and communities, helping to buoy demand- this in contrast to condo towers.

First, multi-units take a different approach to density. Compared with how condo towers deliver many new homes in a smaller area at once, multiplex units are more gradual, typically in established neighbourhoods with established infrastructure and amenities.

This slower approach to density puts less strain on the area and allows for more organic integration of density into a neighbourhood. This is more appealing to communities at large, and allows for growth at a measured pace alongside infrastructure.

Multiplexes also offer more continuity in streetscapes, aesthetically speaking.

And living in smaller clusters of homes, closer to the ground, offers a more house-like living experience in many ways than condo towers, which is a known priority among today’s missing middle buyers.

Depending on the unit, layouts may be more versatile, which helps to address something that missing middle buyers were not getting from condo towers.

What’s interesting is the way in which multiplexes are truly developing a different kind of housing- giving buyers options. It’s no longer single-family or condo, but hitting a reasonable in-between.

Multiplexes Can’t Replace Condo Towers (Literally)

Again, going back to context around the headlines and the stats. Remember that although multiplexes are gaining ground in Toronto right now, there are limitations to this type of housing development versus condos, including:

• The first, and most obvious, is scale. A condo tower delivers 300 new homes, for example. Multiplexes simply can’t compete on scale, which could become an issue as the supply of condos gets absorbed and demand for housing in general continues to grow over time.

• Multiplex doesn’t automatically equal affordable housing. A four-plex in an in-demand neighbourhood will be expensive, even if it is marketed as “missing middle housing”.

• Multiplex development is highly site-dependent, even if it’s possible and permitted in theory. Factors range from everything like width and depth, existing home placement, the reality of parking, to trees.

• Then there are the construction economics. Multiple, neighbouring lots could have identical zoning but very different redevelopment economics because one requires substantial excavation, tree work, servicing upgrades or a more complicated building design.

While these factors are true for condo developers too, developers are typically larger corporations, better able to absorb costs than smaller-scale multiplex developers, or homeowners building on their existing homes.

That doesn’t diminish the importance of multiplexes. In fact, their ability to add smaller amounts of housing throughout established neighbourhoods in a way that appeals to buyers is precisely what makes them valuable. But it does put the idea of a “multiplex boom” into perspective.

The reality is that Toronto needs multiple sources of housing supply working at the same time. Multiplexes can help diversify that supply and fill part of the gap created as condo development slows, but they can’t single-handedly replace the sheer volume of homes that large projects can deliver.

The truth behind the headlines is that rather than a boom (or a bust), the supply of housing is pivoting to align with various factors that make it plausible right now- fuelling its relative growth.

For homeowners and buyers, that makes understanding not only what sits on a property today, but what could be built on it, and around it, increasingly relevant to owning real estate in Toronto.

How this Applies to Your Home (Or Housing Purchase)

For homeowners, one of the more interesting implications of this trend is that a property’s value and utility may extend beyond the house currently sitting on it.

Depending on the lot, zoning, and other site-specific considerations, a property may have the potential to accommodate a multiplex, garden suite, laneway suite, or another form of additional housing. For some homeowners, that could create rental income. For others, it could support multigenerational living, offering space for adult children, aging parents, or extended family while remaining on the same property.

It may also become something to consider when eventually selling. A buyer may not simply be looking at the house as it exists today, but at what the lot could accommodate in the future.

That doesn’t mean every Toronto lot can, or should, be redeveloped this way. Zoning permission is only one part of the equation. Lot size and configuration, setbacks, trees, servicing, access, parking, construction costs, and financing can all affect what is actually feasible.

The takeaway for homeowners is simpler: it may be worth understanding what your property could accommodate, even if you have no intention of building anything today.

Buying a home in Toronto today requires doing a deep dive into the data, but also understanding the context of all the conditions, and the opportunities that exist within that context- for today, and tomorrow too. With decades of experience in identifying those real estate opportunities, I’m here to help!