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MATTHEW SLUTSKY
Senior Buzzer
reply 2214 vote 132
 

Toronto has the most highrise buildings under construction in North America.. Sustainable?!!?

Have you seen this graph from the Toronto City Council’s Economic Development Committee??



It shows 132 highrise buildings under construction in Toronto. BuzzBuzzHome shows 122. Here: http://tinyurl.com/6jc9ken

Pretty insane numbers!

The ranking:
Toronto: 132 high rise buildings under construction
Mexico City: 88 high rise buildings under construction
New York: 86 high rise buildings under construction
Chicago: 17 high rise buildings under construction

Is this sustainable?
25
General Chit-Chat
 
 
 
DUMITRU
Buzzer
reply 35 vote 4
 
 
2 BEST REPLY
^You do make a good point Brian, and I often wonder just how many buildings had to have been completed each year during the boom times to reach our current level. I do however think it's still big news to a younger generation who wasn't around to experience those earlier times, and get to see that kind of growth with their own eyes.
I found where I got my numbers from: Ontario's Ministry of Finance Population Projections.
http://www.fin.gov.on.ca/en/economy/demographics/projections/
A few key points:
-Toronto's 2006 census population was 2.5 million, but was almost certainly out of date the moment it was published. The 2010 estimate puts us at 2.72.
-Ontario's projection for Toronto will put us at 3.36 million by 2036, or an increase of 24,615 per year (assuming a fairly steady linear growth). This should mean that Toronto will hit the 3 million mark in 11 years, or roughly by 2020. This represents an increase of 24% by 2036, but less than the 35% overall provincial growth rate.
-GTA's 2010 projection now put us at 6.2 million, up from 5.5 in the 2006 census. By 2036, we are projected to be at 9.2, definitively reaching London's urban proportions.
-By 2036, the GTA's share of Ontario's population will rise to 51.8%, up from today's 47.1%.
-Peel region is projected to increase by 850,000 over the same period.
-Halton is expected to be the fastest growing census division in Ontario, with growth of 86.7%.
-So based on these numbers, Toronto's share of the projected GTA growth is about 21%, or 640,000 out of 3,000,0000. Do these stats square up with the proportion of new housing developments (both condo and other) in the 416 and 905 regions?
-That last point you made Matt, about low land supply and amateur buyers overpaying for their acquisitions. We heard the same from our interview with Mel Pearl a few months back (mid-way down),
http://urbantoronto.ca/news/2011/06/interview-mel-pearl-lifetime-developments
..and we'll hear a similar sentiment echoed by Sam Crignano in part 2 of our interview next week.
A quick comparison of Toronto with NYC, Chicago, and London:
NYC: 5850 buildings, 7.7 Million, 634 sq km area
T.O. : 1889 buildings, 2.72 Million, 630 sq km area
Chi : 1130 buildings, 2.69 Million, 606 sq km area
Lon: 584 buildings, 7.83 Million, 1572 sq km area
If you compare the first three cities (because of their similar land area), take a ratio of people to buildings, you discover that Toronto and NYC both have very similar ratios (1317:1 for NYC, 1439:1 for Toronto). Chicago's ratio is 2380:1. Just another way to look at how urbanized we've become.
 
 
 
MARCO DIFOTI
Senior Buzzer
reply 529 vote 32
 
 
1
Toronto is hot! People have jobs. We have high immigration. Nothing wrong with that!
 
 
AMIT BHANDARI
Buzzer
reply 162 vote 12
 
 
Greenbelt restricts, as well.
 
 
MATTHEW SLUTSKY
Senior Buzzer
reply 2214 vote 132
 
 
^^True, but much more than just the Greenbelt.... there is the Oakridges Moraine, the Places to Grow Act and such.
Great article in The Star on it, here: http://www.thestar.com/news/article/1064773#article
Some interesting notes from the article above:
- New York has the most highrises in North America with more than 5,800
- Toronto has the second-highest number of completed highrises and skyscrapers in North America, with 1,875
- Toronto is just ahead of Mexico City and Chicago for the number of highrises.
According to Realnet:
- Highrise units now make up 60 per cent of new home sales in the GTA, compared with only 25 per cent in 2000
According to Urbanation:
The region has more than 39,000 condo units under construction, of which "88 per cent of those are already sold.”
 
 
AMIT BHANDARI
Buzzer
reply 162 vote 12
 
 
That last line is interesting - of those 39,000, how are they spread? Meaning, how many of those are finishing in, say 2011, 2012, 2013, 2014, 2015, etc...? This number will be very telling because the GTA has a certain number of completions to happen in-order to just house the influx of people coming IN.
 
 
MARCO DIFOTI
Senior Buzzer
reply 529 vote 32
 
 
@Amit: how many new units need to be built in a year to sustain Toronto's growth?
 
 
LEONARD THE BEE
Buzzer
reply 161 vote 3
 
 
Thanks to Gordon Jang, who had the following to say via LinkedIn:
More stats:
- approximately 150,000 new immigrants arrive in Toronto GTA each year
- an average condo building can accomodate approximately 1000 people
- if all of the 132 high rise buildings that are under construction finish in the same year x 1000...well you do the math
- Canada was regognized internationally as the number 1 country to do business in
Well, I am sure each of us will have a different conclusion about sustainability.
Indeed, there are people who lost money flipping pre-construction condos, especially if they tries to time the market. There area few simply rules that greatly improve the chances of success. Last but not least, seek advice from a professional.
 
 
DUMITRU
Buzzer
reply 35 vote 4
 
 
2
^ I was about to post the same immigration stat that Gordon Jang provided above.
I think these unprecedented levels of high rise construction trace their roots to both migration, as well as the restrictions imposed by the Greenbelt and the Places to Grow Act. Here's another stat that I came across while reading a document published by the Ontario Government if I'm not mistaken, this was a number of years ago.
-At today's rate of immigration, the GTA population should expect to be around 8.5 to 9 million. That's only 20 years away.
-Of that growth, roughly half (or less than half, depending on who's numbers you look at) settle in Toronto itself each year.
-At this rate, Toronto on its own will probably cross the 3 million mark by the end of this decade.
From purely a demand for housing point of view, the math is spot on. We need all these units built year in, year out or the region as a whole will never hope to accommodate the influx of people.
Whether or not rising condo prices are sustainable, I'd be interested in hearing what those inside the industry would have to say.
Personally, as someone who loves tall buildings, I'm simply thrilled at the amount of construction that we're seeing. From a design and architecture point of view, it's a timely opportunity for us to experiment with better and smarter ways of high density living, and perhaps even new forms of housing. I think it's an opportunity worth seizing.
 
 
MATTHEW SLUTSKY
Senior Buzzer
reply 2214 vote 132
 
 
Big +1 above!
Here are some more statistics / information from this morning's BILD event:
INVESTORS
- Of "investors" in the market, about 40% are foreign buyers (via Baker Real Estate)
- Of new construction deals, co-brokering now accounts for 80 to 90 percent vs previous 40 - 50 percent
- Baker says that of purchasers, 70% are true investors and 30% end users
- Baker says, by the time the end user gets in the door, there's been a number of price increases.
- As per Baker, many investors do not care about the monthly return on condos, they now want to safeguard their international money
- Riz Dhanji of Canderel is worried about pricing; rents may not be justified over 500 psf
SALES
- TREB sees the resale market on pace for 90,000 sales includes low-rise in 2011
- Realnet Canada says, there has been over 8 billion dollars worth of condos sold in the GTA this year
- First month sales averaged 54% sold for GTA highrise. Time to hit 70% is 3.5 months
THE FUTURE
- Biggest issue for builders today? Low supply of land and amateur builders overpaying for land
- Resale prices forecast a 4 to 5 percent growth into 2012
- Launches shifting to 2012 from this year due to approvals, etc, as per Baker
 
 
BRIAN PERSAUD
BabbleBee
reply 280 vote 17
 
 
1
Toronto has been producing more high rises than most cities in North America since the 50's. Today Toronto has the second mot, behind NY, which has a much bigger population. In fact, we were producing more apartment units back in the 60s than we did during this 10 year boom
This is not big news
 
 
ROSE MEECHAN
NewBee
reply 3
 
 
With the foreign investors and new immigrants pouring into the country, Toronto will be next London (UK)!!!
 
 
FRANK GRECO
Buzzer
reply 13 vote 1
 
 
1
There are many factors why the number of highrise condos have "skyrocketed":
1. Affordability: as homes become more expensive relative to income, ppl will have no choice but to buy more affordable and smaller condo units;
2. Investors have seen condos as a way to make money. Investors now make up more than 50% of purchasers. Condo prices have been rising 8-10% a year- better than most stocks or bonds! Returns on renting condos is waining but appreciation in condo purchase prices still fuelling the market.Low Interest ratesis also a huge part of the fuel!;
3. Immigration numbers for the GTA are still vhigh. Most immigrants are looking to buy condos, which are more affordable than towns or singlehomes.;
4. Empty nesters and the condo lifestyle are really connecting now. More than ever ppl with money are opting for the luxury condo lifestyle in great city locations and builders are happy to deliver those condos @$800-$900 per square foot!
5. The number of international investors has never been greater. TO prices are relatively cheap from where they live in the world;
6. Canada is the best place in the world to do business. The GTA is at the centre of the market in Canada. Those investors see Canada as the next place to expand and park their money and family.
 
 
MATTHEW SLUTSKY
Senior Buzzer
reply 2214 vote 132
 
 
Dumitru said:
-That last point you made Matt, about low land supply and amateur buyers overpaying for their acquisitions. We heard the same from our interview with Mel Pearl a few months back...
..and we'll hear a similar sentiment echoed by Sam Crignano in part 2 of our interview next week.

Yes. I spend my days speaking to builders, and I hear it from them every day. They are seeing crazy dollars spent on sites, which is pushing up their selling prices to levels that they should not be at.
 
 
MARCO DIFOTI
Senior Buzzer
reply 529 vote 32
 
 
Some information from today's National Post - http://news.nationalpost.com/2011/11/08/canadian-home-prices-have-doubled-in-the-last-decade-study
- There was a 212% increase in the number of units sold between 2000 and 2010.
- the most expensive sale in the city, the $28-million penthouse of the Four Seasons Residences.
- “Toronto has become the largest condominium market in North America,” said Michael Polzler, executive vice-president of RE/MAX Ontario-Atlantic Canada.
"With so much condo development, it has increased demand for single-family detached homes in core neighbourhoods, led by Leaside, where house price rose by 111%."
 
 
MATTHEW SLUTSKY
Senior Buzzer
reply 2214 vote 132
 
 
There was an article in the Globe and Mail today, where Tridel had some interesting things to say.
Source: http://www.theglobeandmail.com/news/national/toronto/condo-investors-may-head-for-exits/article2277142/
Globe and Mail said:
Builders, however, maintain the market is robust and suggest many who issue dire warnings are underestimating demand. While some suggest up to 60 per cent of all city condos are bought by investors, Tridel Group of Companies senior vice-president Jim Ritchie said his numbers suggest no more than 15 per cent of buyers are looking for an investment.
“As an industry, we’re getting pretty accustomed to people telling us that things are out of control and unsustainable,” said Mr. Ritchie, whose company plans to build eight new condo towers next year. “If this market had sprung up overnight, then maybe I’d understand. But this has been a solid contributor since 1967, and has been doing well for the last 10 years. This is not a blip.”

Most interesting was the fact that Jim Ritchie says that he believes no more than 15% of condos are sold to investors. Tridel is one of the largest builders in the GTA, and as such has a pretty good source of information to pull from.
 
 
CONDOSHARK TEAM
NewBee
reply 1
 
 
Interesting ... My deals , 90% are investors
 
 
EMIL VOJKOLLARI
NewBee
reply 1
 
 
CondoShark said:
Interesting ... My deals , 90% are investors


Good point Leo! My stats are similar as well. I think we'll have to remember the nature of the product. Pre-construction condos would generally suit to an investor’s personality and there’s nothing scary about that yet.
I don't think it matters much what the investor/end user ratio is for pre-construction. I think what matters is the absorption rate when the building is built. Absorption could be both the sale or the rental of the unit to the user.
End users usually have these qualities:
- Risk Averse (would like to see the finished product)
- Shorter time frame for moving in the Real Estate (If an end user buys pre-con and waits 3-5 years to move in, the chances are the real estate needs would have changed by then.)
While many end users are now realizing the benefits of buying pre-construction, yet more and more investors are turning their eyes to Real Estate. The investors work with agents who give them access to the condo sales before the doors are opened to the public. The few end users who purchase pre-construction, not having much experience in the matter, wait until the doors are opened to the public. As agents who specialize in pre-construction, we usually don't see these clients.
Builders would definitely have more accurate stats.
 
 
MATTHEW SLUTSKY
Senior Buzzer
reply 2214 vote 132
 
 
From Paul Golini Jr. in the Metro News:
http://www.metronews.ca/toronto/comment/article/1137475--under-construction-183-high-rise-buildings--page0
- There are 183 high-rise buildings under construction across Toronto right now.
- the City of Mississauga is on the map with 13 high-rise buildings under construction this month. That’s up from seven this time last year.
- In the City of Toronto, the value of residential building permits was more than $1.1 billion by the end of last year.
- Major U.S. cities like Chicago, Houston and Miami are building at a better pace than this time last year.
- New York has 75 buildings under construction right now,
- Chicago has 25 high-rise buildings under construction right now
 
 
SYED SHAH
Buzzer
reply 10 vote 1
 
 
Places like  http://groperty.com/Shangri-la_Condo.html can house massive amounts of people (572 units!) and there are a number of large projects underway as mentioned above. It will be sustainable to a point, Toronto still enjoys a healthy injection of professionals as well as capital on an annual basis. It will be a significant amount of time before we see the market in favour of buyers in terms of price.
 
 
MARCO DIFOTI
Senior Buzzer
reply 529 vote 32
 
 
Mods: can you moderate the troll comments, like ^^? Obviously someone just link baiting to that Groperty website.
 
 
SEAN
BuzzStaff
reply 33 vote 10
 
 
Emporis has updated their database. Now there are 184 high-rises under construction in Toronto: http://www.emporis.com/city/toronto-canada

And 92 under construction in NYC: http://www.emporis.com/city/newyorkcity-ny-usa

Still a pretty big gap!
 
 
JAFFA
NewBee
reply 1
 
 
Research what other houses in your neighborhood have sold for in the last couple of years to determine a reasonable asking price. Your county tax department has records of such comparable sales. Before you set the asking price, take into account closing fees, other selling expenses, and the amount of cash you want after the sale. Your home will sell faster if it is priced appropriately. Thanks.
Regards,
http://mesarealestateaz.com/

 
 
STEPHEN MARLOW
Buzzer
reply 43 vote 5
 
 
The only thing I see wrong with that is how crowded and dense it might become. Get with it or get lost!
 
 
OM BUILDER
NewBee
reply 1
 
 
hello everyone its great news that Toronto is leading in highrise buildings means in future Toronto will lead the world in high rise buildings

 
 
 
 
 

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