Altus recently released their annual report on construction costs in Canada and you can read REMI Network’s article discussing Altus’s report here.
The overall gist is that construction costs for multi-unit housing projects are increasing across Canada and are projected to increase, in most markets, by 1% to 4% by the end of this year, but by 5% in the GTA. This trend all but ensures that rental apartment supply will never be able to catch up to rental apartment demand, particularly in the GTA and probably in a few other major markets too.
One of my friends used to say that we’re headed toward a future in which the problem will be a lack of demand, not supply, which is more or less a “post scarcity” argument. He’s probably right when it comes to a society-wide or economy-wide macro perspective, but the steady rise in construction costs in the multi-unit housing industry definitely seems to be the reverse case, or exception that proves the rule.