CMHC just released its Spring 2026 Housing Supply Report, and the headline is that small multiplex buildings in Toronto now outnumber large condo towers for the first time ever. Most people are calling it a win. The real story is more complicated than that.
Canada built 6% more homes in 2025 than the year before. But Toronto actually built fewer homes and ranked last among all major Canadian cities on a per capita basis. Lower than Calgary. Lower than Montreal. Lower than Vancouver. For a city with Toronto’s population and housing demand, that is not a good number. Here is what is actually driving the shift, and what it means if you are investing in Toronto multiplexes.
How Toronto’s Zoning Rules Changed the Math for Builders
Toronto has been loosening its zoning rules steadily for 25 years. Basement suites were approved in 2000. Laneway suites came in 2019. Garden suites followed in 2022. In 2023, the city allowed up to four units on any residential lot without special approval. In fall 2025, mid-rise buildings on major streets got fully approved. And in 2025, sixplexes were given the green light across nine wards in Toronto and East York.
On top of that, the city waived development charges for buildings up to six units. That is a big deal. Development charges used to add hundreds of thousands of dollars to the cost of a small project. Removing them changes the economics significantly and makes projects viable that simply were not before.
The reason you are seeing more small multiplexes is not because builders suddenly discovered them. Builders and investors have always wanted to build them. The rules finally allow it, and that is starting to show up in the numbers.
A Quick Timeline of "Missing Middle" Progress in Toronto
To understand how we got here, here's a timeline of key changes:
- 2000: Secondary suites approved
- 2019: Laneway suites approved
- 2022: Garden suites approved
- 2023: As-of-right multiplex zoning passed (up to 4 units)
- 2025: Mid-rise on Major Streets approved (up to 60 units and 6 stories)
- 2025: Sixplexes approved for 9 wards (Toronto and East York plus Ward 23); DCs for up to 6 units waived
- 2025: Retail in Neighbourhoods approved
Toronto vs Montreal: How Far Behind We Still Are
Even with this progress, Toronto is in the early stages of a much longer shift. Montreal is the clearest benchmark. Close to 75% of Montreal’s housing stock is low-rise multi-unit buildings. Toronto is under 20%. That gap does not close in a few years. It took Montreal decades to build that base.
What that means practically is that Toronto’s missing middle is growing but still small relative to what the city actually needs. The regulatory changes are real and they are helping. But the supply response takes time to catch up to years of restricted zoning and underbuilding.
For investors, this gap matters. The city is not going to overbuild its way out of a housing shortage anytime soon. The conditions that support multiplex investing, tight supply, strong rental demand, and new zoning flexibility, are not going away.
What Softening Rents and Higher Vacancy Actually Mean
The Spring 2026 report notes that vacancy rates are up and rents have softened. That is accurate. More condos have been converted to rentals, which added supply to the market. Much of the increased vacancy is renters moving around to take advantage of better options, not renters leaving Toronto.
Longer term, the demand for rentals in Toronto has not fundamentally changed. Population growth, high home ownership costs, and the potential for immigration to pick back up all point to sustained rental demand. The softening is real but it does not represent a permanent shift in the market.
The bigger concern is what is not being built right now. Toronto is building at its lowest rate since 2009. There is always a lag between when a project starts and when units are actually available to rent. The shortage being created today will show up as a supply gap a few years from now, and pent-up demand will accelerate that.
The Opportunity for Toronto Multiplex Investors Right Now
The conditions for multiplex investing in Toronto are better than they have been in years. Prices have come down. Zoning restrictions have eased significantly. Development charges have been waived for smaller buildings. And the longer-term supply and demand picture still favours investors who hold through the cycle.
If you are looking at duplexes through sixplexes in Toronto, this is the environment where well-priced deals can still be found. The fundamentals are there. What takes work is identifying the right property, running the numbers accurately, and planning a renovation that actually moves the value and the rents. Use our total return projections calculator to stress-test any deal before you commit.
For investors serious about building a multiplex portfolio in Toronto, having experienced support makes a real difference. From property selection to renovation planning to tenant placement and refinancing, every step affects your returns. Understanding how cap rates work is a good place to start before evaluating any deal.
Start Building Your Toronto Multiplex Portfolio
The CMHC Spring 2026 report confirms what Toronto multiplex investors have been watching for years: the rules have changed, the economics are improving, and the supply gap is not going away. Prices are down, zoning is more flexible than it has ever been, and the window to get into well-priced properties is open right now. But knowing the market and executing well on a deal are two different things.
Whether you are evaluating your first multiplex or adding to an existing portfolio, the details matter. The right property, the right numbers, and the right renovation plan can mean the difference between a deal that cash flows and one that does not. That is where having the right team behind you makes all the difference.
Our brokerage specializes in Toronto multiplexes. We’ll help you find deals, crunch the numbers, and guide you through renovations and management. If you want full support in Toronto multiplex investing, our team can help you:- Find high-potential properties
- Crunch the numbers so you know exactly where you stand
- Coach you through renovations to maximize returns
- Lock in great tenants
- Provide full property management so your investment runs smoothly
What Toronto Real Estate Investment Is Right For You?
Check out our complete Toronto real estate investment guide for all the details and real-life examples. If you’re ready to dive in, just book a call with us!
This is for educational purposes only; it does not guarantee future performance or serve as financial or tax advice.
