Toronto’s condo boom is hard to ignore, just look up. The city currently lays claim to having 215 tall buildings under construction, according to research firm Emporis.
Based on Canada Mortgage and Housing Corporation numbers published July 10, it appears Canada’s residential construction surge, which Toronto—as the nation’s biggest city—is a big part of, shows no signs of letting up, suggests BMO.
Nationwide, the seasonally adjusted annualized rate of housing starts in June leapt to 248,138 units, surpassing May’s rate of 193,902 units. Meantime, the number of homes contractors broke ground for last month across the Toronto census metro area, a region that includes a majority of the GTA’s municipalities, skyrocketed 231 per cent month-over-month for what amounts to an annualized rate of 49,392 units, according to CMHC.
“Primarily led by apartment starts, the total number of housing starts in the Toronto CMA trended up to reach a near two year high in June,” says CMHC in a news release, adding gains were “driven by condominium apartment starts which recorded a 30 year high for the month.” Most condo starts were spread evenly throughout Toronto, Mississauga, and Vaughan, the national housing agency reports.
In a note published the day after CMHC’s release, BMO economic analyst Priscilla Thiagamoorthy suggests urban condo development in particular buoyed the national starts after a three-month downward trend. It reached a record high annualized rate of 140,300 units on the shoulders of a 62 per cent month-over-month leap.
So who is fueling feverish construction rates by snapping up condo units in urban centres such as Toronto? Many may be inclined to cite foreign buyers, but experts have listed other factors as well. Thiagamoorthy says a few different groups are responsible, including purchasers from overseas.
“Demand for high-rise housing remains robust with millennials, international migrants, and downsizing baby boomers all vying for the last affordable option in Vancouver and Toronto,” she writes in the note titled “Condo Starts Hit the Sky.”
BMO does not anticipate these forces abating any time soon. “Despite headwinds, including government zoning restrictions and rising material costs, construction activity should remain firm, supported by demographic demand and a healthy labour market,” Thiagamoorthy notes. So expect those cranes to remain a fixture of the Toronto skyline for some time.
Photo Credit: Tony Cicero.
