To skeptics wondering who’s living in all the condo towers popping up round town, Urbanation has the answer: heaps of renters clamouring to live in the core. Last year saw the number of condo apartments leased hit an all-time high, up 15% over 2013 to an eye-popping 22,765 units.

“It was surprising the market continued to grow at the rate it did last year,” Urbanation SVP Shaun Hildebrand tells Bisnow, noting the 15% uptick in transactions came after a breakout year in 2013 for the condo rental market, which grew 28% versus 2012. “Incredibly strong demand” for condo rentals meant the market absorbed the greatest-ever amount of new supply in 2014. Condo rents appreciated just 0.8% in 2014, a considerable deceleration from 4.1% in 2013. “Rent growth has been held back by the huge increases in supply we’re seeing, creating more competition among landlords,” Shaun says.

Half the units in condo buildings under construction are destined to be rentals, Sean points out. “The condo market has become the de facto rental market for new supply.” It can be a tight squeeze for renters, however, as builders shrink unit sizes to maintain affordability amid rising land and construction costs. Last year the average condo was 761 SF, down 12 SF from the year before. (Forget that: Smart House, a condo project on Queen Street West by Malibu Investments and Urban Capital Property Group, features the city's first micro-condos, some under 300 SF.)

As people continue moving downtown in droves, demand for condo rentals remains quite strong, growing at the same pace as listings in 2014, which increased 10% in the final quarter. But Shaun notes things will soon change on the supply side, with condo completions poised to slow by 2017. “I think a lot more attention is being paid by developers and investment firms to developing purpose-built rental apartment buildings.”