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The CN Tower in Toronto is framed by small saplings and condo developments as seen from the West Don Lands near Bayview Avenue and Eastern Ave.

Fred Lum/The Globe and Mail

A couple of years ago, real estate watchers were still talking about the lack of new purpose-built rental units in the Greater Toronto Area.

That story has since swung in the other direction.

Colliers International, in its Fall 2015 GTA Land Report, is the latest to note the change, as new condo construction is expected to decline between now and 2017, while purpose-built rental construction is forecast to increase.

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For downtown Toronto, Colliers predicts 7,703 condo unit completions in 2015 (that is, developments already physically under construction and being built, not simply in the planning phase).

This is forecast to fall to 3,767 in 2016 and 771 in 2017. Purpose-built rental developments, on the other hand, are expected to gain from 120 in 2015, to 2,194 in 2016, before easing to 830 in 2017.

The market for the new rentals are, predictably, young professionals and millennials.

Yet Colliers also notes that caution is advised with its forecast.

Purpose-built rentals require investors willing to go the long haul. The return on investment is delayed compared to condo developing. So the story could well swing again.

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