Has the Toronto building boom peaked?

[Phil McAvity]

To put Toronto's skyline in perspective, it now has six buildings over 800 feet tall and the entire state of Texas only has five and that doesn't even include the CN Tower. Three of those 800+ foot tall buildings in Toronto have been built in the last five years. Yowza!

If this boom continues for the next 15 or 20 years, Toronto will pass Chicago and could challenge Hong Kong and New York City

[a very long weekend]

canada has pretty much open immigration for well-educated STEM people, so maybe there's no limit to how many units can go up. but these high rise projects are pricey, and that market should stall and start much more than new homes in 3-4 story suburban walk-ups.

one thing that toronto has going for central city growth is that the infrastructure is remarkably poor for a city of its size and importance, and they just can't seem to get it together. maybe a right wing government will come in and slash services to the bone and shift the money to rail infrastructure, but it's unlikely. the incentive to live close to work or one of the commuter rail/metro stations is very high. so, huge pull toward high density living.

[koops65]

The boom has been ongoing for a decade now, and doesn't show any real signs of ending soon. New proposals keep coming out (bigger and taller than ever) and old proposals keep becoming construction zones at a regular rate. Nothing has really changed since 2007, or 2011, or 2015...

[GeneralLeeTPHLS]

If there is any "peak" it wouldn't even have reached us yet I think, if you consider height a more important metric. This year is seeing a lot of construction like any other year, but we're really getting work into a supertall....along with a good few 200+ towers.

[Phil McAvity]

Originally Posted by koops65

The boom has been ongoing for a decade now, and doesn't show any real signs of ending soon. New proposals keep coming out (bigger and taller than ever) and old proposals keep becoming construction zones at a regular rate. Nothing has really changed since 2007, or 2011, or 2015...

Exactly. The city also has something on the horizon that I and many others have been waiting a very long time for-Canada's first supertall.

To put Toronto's building boom in context, the city now has more 500+ footers than Boston, Dallas and Philadelphia combined

[eltodesukane]

At least there was a peak, whether it last or not. Much was built since 2000.

http://www.skyscrapercenter.com/city/Toronto
TO Building Completions Timeline 2018-11-21

[C.]

[/b]Q. Has the Toronto building boom peaked?

A. No.[/b]

It's a function of population and economic growth. Ins't the Toronto area adding over 100,000 people a year? They got to live somewhere and a apartment or condo is cheaper than a single-family home. There will probably be more high-rise development with the scarcity of land available for development. In other words, maybe Toronto's growth the last decade has been the norm and the real boom has yet to come.

[Mongo62]

Coming in late to this thread, since I just noticed it existed today.

This high-rise building boom has been ongoing since the early 2000s, far longer than a typical "boom-and-bust" cycle. I am becoming increasingly convinced that it is NOT a normal cyclical boom, but instead a near-permanent change of state in Toronto's building ecosystem.

This has happened twice before in North America: New York City in the late nineteenth century, and Chicago not long after. In both cities, high-rise construction ground to a halt in the 1930s and 1940s, but resumed its rapid pace in the following decades, with the usual cyclic pattern superimposed on top of the secular shift.

I believe that the reason this happened was that both cities had reached a critical mass of population and economic activity, that caused a major self-reinforcing improvement in the financial viability of large-scale high-rise construction. Toronto had apparently also reached this critical mass in the early years of this century.

So I think that the exact quantity of high-rise building activity will vary from year to year, but the average rate will remain at or near current levels into the foreseeable future.

[TSteph9]

Originally Posted by C.

[/b]Q. Has the Toronto building boom peaked?

A. No.[/b]

It's a function of population and economic growth. Ins't the Toronto area adding over 100,000 people a year? They got to live somewhere and a apartment or condo is cheaper than a single-family home. There will probably be more high-rise development with the scarcity of land available for development. In other words, maybe Toronto's growth the last decade has been the norm and the real boom has yet to come.

Have to agree with you there. People have been talking about the bubble bursting and the condo boom dying out for years but there seems to be no end to it.

[C.]

Originally Posted by TSteph9

Have to agree with you there. People have been talking about the bubble bursting and the condo boom dying out for years but there seems to be no end to it.

Maybe COVID will finally pop the 19-year old bubble.

Looks like residential construction in Toronto is still proceeding at a steady pace.

[WhipperSnapper]

Because there's an endless supply of international investors that seem able to flip properties in perpetuity. Many of those properties are never meant to be redeveloped to correct a misconception that its all about building.

You guys are misunderstanding the bubble. It's a price bubble. The young, middle class are already largely priced out of the market. They usually need family assistance to raise families in 500 square foot one bedroom apartments. The average number of people per unit is up something like 40% in the last 10 years and will only escalate now that the price per square foot is far north of $1000. The 100,000 immigrants coming to the city are not participating in the new inventory to the degree you guys think.

Any major correction will shut down supply for at least a few years in its tracks even if there is demand for more inventory. Only non market gets built with depreciating property values. It has happen with every boom and bust and none of them reached the height of this price bubble.

Just because predictions have come and gone doesn't mean it's not a bubble either. It's not a closed ecosystem. You have heavy investment from foreigner markets with the capability to buy Toronto/ Canada ten times over. It's nearly impossible to predict when and if they pull out.

Construction will resume but, it won't be continuing at the scale obtained by the last 20 years. It won't be starting over at 12 storeys, year 2000 levels either or should it take 20 years to reach this point again.

[WhipperSnapper]

Originally Posted by C.

[/b]Q. Has the Toronto building boom peaked?

A. No.[/b]

It's a function of population and economic growth. Ins't the Toronto area adding over 100,000 people a year? They got to live somewhere and a apartment or condo is cheaper than a single-family home. There will probably be more high-rise development with the scarcity of land available for development. In other words, maybe Toronto's growth the last decade has been the norm and the real boom has yet to come.

So much of the economic growth is tied to real estate in this city. It's far less rosy when you take that out of the equation.

Another example, I bought my first condo for $120,000. It's now worth $850,000. My starting salary back then was $32,000. It's now about $55,000. That's the last thing you want to be the norm.

I love tall towers as much as anyone. We cannot forget that lives occupy them. I'm probably wrong. I just have a feeling that gets pushed to the side too often on these skyscraper forums.

[C.]

Originally Posted by WhipperSnapper

So much of the economic growth is tied to real estate in this city. It's far less rosy when you take that out of the equation.

Another example, I bought my first condo for $120,000. It's now worth $850,000. My starting salary back then was $32,000. It's now about $55,000. That's the last thing you want to be the norm.

I love tall towers as much as anyone. We cannot forget that lives occupy them. I'm probably wrong. I just have a feeling that gets pushed to the side too often on these skyscraper forums.

I have no idea where you're trying to say.

Unless all the condo towers being built in Toronto are just sitting vacant, they are proving homes for many people. Per this link, the the rental condominiums vacancy rate is just 1 percent, which is woefully far below what's needed for a healthy functioning market.

Where would all the people live if the towers of the last 20 years weren't constructed? Fertile farm land and that green belt which Torontonians are so proud to brad about would have been raped, pillaged, and devoured for low-density urban sprawl. That's what happens in most other North American cities. The growth restrictions on where development can occur in Greater Toronto, directed to the urban centers, comes at a cost.

As much Toronto is building, it sounds like it is no where near enough to keep up with demand. Either remove the green belt restrictions and open up more land for development or allow higher densities in other areas of the city. The neighborhoods traditionally zoned for single-family homes should be prime targets for intensification.

But it's easier to blame the foreigners I suppose.

[C.]

Has the boom peaked yet? Will it return to booming after the COVID-19 pandemic ends?

[isaidso]

Originally Posted by C.

Has the boom peaked yet? Will it return to booming after the COVID-19 pandemic ends?

People expected real estate prices and sales to crater due to COVID. There was a dip but then both started rocketing higher again. All COVID seems to have done is created a momentary pause and pent up demand. The big question mark is immigration.

Toronto growth is highly correlated to high immigration. Trudeau said that immigration levels are to be bumped up to make up for the shortfall in 2020/2021. It's still too early to tell if targets will be reached 2021-2026. Workers have returned to building sites so projects already under construction are getting built as units are pre-sold and office space spoken for. Proposals are another matter.


Canadian Immigration Targets

2021: 401,000
2022: 411,000
2023: 421,000

Century Initiative Targets

2024: 450,000
2025: 475,000
2026: 500,000

[GeneralLeeTPHLS]

Although proposals have dropped off a bit in the last year, the amount of real esate commercial and residential in the city in the process of being built is very substantial, and again....a peak can't really be pin pointed I'd say. Not yet in any case.

[Phil McAvity]

Originally Posted by C.

I have no idea where you're trying to say

Me neither

He brought up his income and the value of his condo (over a time frame he never mentioned) but was totally unable to make a cohesive point about anything. If he had a point, I don't even think he knew what it was

[urbandreamer]

^His point was that on an entry level salary he was able to buy a condo. Today that's impossible. (I remember seeing 1 bedrooms in that ugly white brick building at Adelaide and Bathurst starting from $95000 c.1998.)

[C.]

Originally Posted by urbandreamer

^His point was that on an entry level salary he was able to buy a condo. Today that's impossible. (I remember seeing 1 bedrooms in that ugly white brick building at Adelaide and Bathurst starting from $95000 c.1998.)

That much is apparent. You'll get no dispute from me that real estate could
previously be purchased on a modest salary, and now it's simply out of reach to more people and more people as prices continue to rise.

It's the rest of WhipperSnapper's post that has me confused. Each of these new condo towers provides homes to hundreds of individuals and families. It's not like they are staying vacant or underused. Isn't the rental vacant rate still at 1%? That's far below what is considered a healthy market, which is closer to 4 or 5%. That's one of the reasons why rents are rising so fast these days. As much as Toronto is adding new housing, it's no where near what's needed to meet the demands for housing caused by high levels of immigration and young adults looking to move away from their parents and start their own families.

Most cities meet this demand by just ever-sprawling outward. Toronto makes an attempt to limit sprawl and courage intensification in certain neighborhoods, but the 30,000 units build every yearly is no where near enough to accommodate a metro area growing by 100,000+ annually.

Sure, there may be more affordable places many hours outside the city, but people need an income to survive, and all the decent jobs will be located in a major city.

Good to be a boomer with a home in Toronto I suppose, but I feel bad for anyone else coming in afterwards without an sizable inheritance.

[Northern Light]

Originally Posted by C.

Has the boom peaked yet? Will it return to booming after the COVID-19 pandemic ends?

In a word, 'No'.

I've been following Toronto developments for a very long time; I don't think I've ever seen more proposals with higher unit totals than the last month.

Some of that had to do with concerns over when Inclusionary Zoning would kick-in.

That will, in fact, be next September.

Still......with a phenomenal flurry of activity.

Not even counting the mega-site that is the Downsview lands....