Toronto’s condo construction boom has made the city “North America’s new high-rise metropolis,” says a study from a real estate research group that shows the city has more than twice as many high-rises under construction than New York.
In all, six of the ten cities in North America with the most high-rises being built are in Canada, according to the study from construction data mining company Emporis — including the Vancouver suburb of Richmond.
But Canada's dominance on the list may have as much to do with a lacklustre real estate market in the U.S. as it does with Canada's now-sputtering housing boom.
“Toronto's construction industry has seen a continuous upward trend over recent years. October 2012 alone saw 15 high-rise building sites more in Toronto than November 2011,” Emporis said in a press release. “In New York City in the same period, on the other hand, construction of high-rises decreased by just under a fifth, from 86 in September 2011 to 72 in October 2012.”
Vancouver took third place in the survey, trailing New York and Toronto.
STORY CONTINUES BELOW SLIDESHOW
But how long Toronto remains the continent’s high-rise leader is in serious question. With sales volumes under pressure and prices flatlining, many market analysts say there is an oversupply of housing in the city, and potentially other Canadian markets.
Even as construction continues at a breakneck pace, sales volumes in the Toronto area are dropping rapidly. Industry group BILD reported earlier this week that total home sales in Toronto this year are down 23 per cent compared to 2011.
The growing disconnect between supply and demand in the housing market could have negative consequences for the economy if construction slows. Construction jobs amounted to more than 7.4 per cent of all employment in Canada in April of this year, compared to 4.2 per cent in the U.S. Even at the peak of its housing boom, U.S. construction employment never exceeded 6 per cent of all jobs. That makes Canada more vulnerable than the U.S. was to an economic slowdown if the housing market continues its recent decline.
Vancouver’s housing correction appears to be more advanced than Toronto’s. The city reported a 25-per-cent decline in house prices in August, year on year. U.S. housing market guru Robert Schiller, who is credited with predicting the housing bubble bust in the U.S., said that Vancouver’s housing market “looks like part of California,” referring to that state’s half-decade-long housing bubble bust.
The study also notes that, even if current trends continued for decades, Toronto would be unable to overtake New York for total number of high-rises.
"There are currently 6,009 completed high-rises in the city on the Hudson; Toronto, by contrast, has 2,501," the report noted.
— With earlier reporting
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