Article content

TORONTO — Canadian mall owners are adding condos and apartments to their shopping centers, seeking to capitalize on a supply-constrained housing market while reducing exposure to a struggling retail sector.

Developers such as RioCan REIT, Canada’s largest property trust, and the property units of some Canadian pension funds are turning prime land that has historically not been put to best use – such as parking lots or low-rise retail – into housing in one of the world’s most expensive, supply-constrained residential markets.

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or As stores close, Canada's mall owners turn prime land into condos Back to video

In the greater Toronto area, there were 12,500 new homes available to purchase in October, less than half the average between October 2000 and 2015, according to Altus Group.

The rental market is just as tight. Toronto has a 1 per cent rental vacancy rate, according to the Canada Mortgage and Housing Corporation. That was despite the highest level of rental construction in 25 years in the third quarter, according to Urbanation Inc. Home prices have surged more than 60 per cent in Vancouver and 40 per cent in Toronto in the last three years. Even pullbacks in these markets this year following policies to dampen price gains appear to be reversing on continued demand and limited supply.