Global Toronto

Toronto Crane Count Jumps To 120 – More Than 2x Any Other City In North America

Toronto is still the King of North American real estate development. The Rider Levett Bucknall (RLB) Crane Index shows Toronto had 120 active construction cranes in July. Toronto not only tops the list for the most real estate development in North America. It also has more than twice the number of active construction cranes than the next city on the list.

Crane Counts and The Business Cycle

Why crane counts? The number of high rise projects are a major component of the business cycle. When development is booming, so is the economy. A strong economy helps to drive necessary components of real estate growth. That is, there’s cash for more  employment, offices, and retail spaces need to be created. All of these people need a place to live, producing more residential real estate. The reverse happens when it begins to slow down. The application of real estate to the business cycle is so common, RLB even gives cycle estimates.

Toronto Crane Count Jumps To 120 – More Than 2x Any Other City In North America.png

Source: Rider Levett Bucknall. Better Dwelling. 

The cycle is broken down in to growth and decline periods, each with three phases – peak, mid, and trough. Peak is when things are the highest, also called the top of the cycle. Mid is when project numbers are firmly starting to rise in the growth, and drop in the decline. Trough is when there’s minimal activity, and the market has bottomed. How long it spends in each one of these phases is dependent on how inefficient the market has become. Got it?

Toronto High-Rise Development Tops The List Again

Toronto real estate development topped the list again, even toppling its own record. There were 120 cranes deployed for real estate development, up 16 cranes from January. This is an increase of 23 cranes from last year’s eye-popping numbers. RLB analysts note most development is outside of the city core. The projects are split between residential and mixed-use. The city now has more than twice the number of high-rise cranes as the next city on the list.

North American Real Estate Development Cranes

The number of cranes actively used for real estate development, according to the RLB Crane Index.

Source: RLB, Better Dwelling.

Even though there’s a lot of projects in the pipeline, things may cool down soon. Toronto is forecasted to be in the mid-decline phase for single-family development. Multi-family development, a.k.a. apartments, are now at peak growth.

Seattle Sees Fewer Cranes, While Los Angeles Ramps Up

In a distant second for crane count are Seattle and Los Angeles. Both cities had 49 cranes in July, but are heading in opposite directions. Seattle has 16 fewer cranes than they did last year. Both low-rise and multi-family are at peak growth in Seattle.

Los Angeles on the other hand has seen things pick up. The 49 cranes in July are 13 more than seen during the same period last year. The city has an estimate of peak decline for both low rise and multi-family residential development.

Calgary Cranes Jump Due To Condo Development

Calgary, the only other Canadian city tracked by the firm, is seeing a rise in the number of cranes. There were 34 cranes deployed at development sites in July, up 8 from the same time last year. The firm noted high-rise multi-family projects are a major contributor to the climb. Separately, the RLB has houses in mid-growth, approaching peak development. It also labeled apartments in mid-cycle decline, which logically hits the trough next. This would see the region enter a period of low growth.

New York City Sees Cranes Jump, But Enters Peak Decline

New York City, often used as a leading indicator for the cycle, had a jump in cranes. There were 27 cranes in July, up 7 compared to the same month last year. Houses are forecasted to be in the mid-decline phase. Apartments have entered the peak decline phase.

Earlier this year RLB analysts forecasted a global slowdown in real estate development. Slowing growth of the global economy was the biggest reason cited. Tighter credit conditions and trade tensions also weigh on growth.

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17 Comments

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  • Marc 5 months ago

    Los Angeles is seeing population growth reverse now, which is interesting. More development, fewer people living in the city.

    Toronto and LA actually have very similar trajectories, 10 years apart. In the early 2000s, LA was experiencing huge growth, especially from Asia. When prices started to collapse, so did the immigrants.

  • Gregory Costigan 5 months ago

    Honest question – how does TO support this? Population and economy are good I suppose, but really…..?

    • MH 5 months ago

      Let me try. By gorging on debt?

    • Rui 5 months ago

      It doesn’t. The economy is not that good. Jobs that are coming into the city don’t pay enough to maintain the housing costs and they have been on a bit of a downward spiral given the lower level of activity of the recruiters – same jobs keep getting posted time and time again with the some of the US companies recently coming in starting to rethink their Canadian plans (at least in IT).

      • Millennial Whinger 5 months ago

        Stop.

        The economy is great and the tech sector in Toronto is on fire. Everyone and their moms are making north of $100K. With interest rates in the dumpster and currency devaluation, and no disincentives for speculating, current prices are a steal.

      • Chester Pape 5 months ago

        You got that right Rui!

        The minimum wage in Toronto is working for free!

        Thousands of graduates have to work for free via unpaid internships for several months, then after the contract is done, they end up laid off the job!

        Toronto is a crappy city that depends on mass migration and global capital.

    • Millennial Whinger 5 months ago

      Yes, really. Toronto is booming. You can tell as much of the infrastructure is becoming worn and ghettoized, even the improvements made along queens quay in the rush for pan am glory.

      Pay is still relatively low in Toronto but even that is catching up rapidly with all the tech and financial sector growth.

      Get in now before the big boom arrives.

  • Grizzly Gus 5 months ago

    If you took away all the investor-owned units (north of 60%) we would be on par with LA and we still have a lot of catching up to do with some of China’s world-class ghost cities.

    • Joseph 5 months ago

      Further to this Gus, if the current plans of hotel chains comes to full fruition (and it’s actively happening), then the Air BnB owners might get into a bit of a jam if they start consistently having to lower their asking prices due to less volume.

      Less income, higher chance of missing mortgage payments.

  • Bluetheimpala 5 months ago

    Prolonged asset bubbles create massive liquidity issues. There is sell side that,for a while, is matched on the buy side at a higher valuation and thus providing an investment/return. We know that the current housing starts are based on older money, say at least 18 months old but could be up to 24 months.
    The question in my mind: Is the building just dumb money that got caught up in the 2017-to-mid-2018 euphoria or is it new capital that believes in some forward valuation?

    I don’t know how the assignment flipping has been going which would be interesting information because it would put perspective into forward valuations. Assignments are incredibly hard to track since they are contracts NOT exchange of title/land/ownership. Assignments are an obligation to buy the widget NOT the widget itself so there is no registry. Also, as we know, they represent leverage; put 10% down for the hops of make a return on the 100% asset appreciate. If there is high assignment flipping then it looks like the music is still playing and may continue but if the assignment market has tanked, which is impossible to track without boots on the ground, then it is very telling. But what do I care, I live in the country. Condos are for dem city slickers. YeeHaw! Tock. BD4L.

  • Frost 5 months ago

    Good, building more condos is great news. The more FOMO investors the more empty units will be available for rent when it all tanks.

  • slowly boiling frogs 5 months ago

    So how do they differentiate between condo/apartment/office building cranes and all those I see along Eglinton Avenue for the cross town LRT construction and other such infrastructure projects?

    • Poolio 5 months ago

      They’re tower cranes, so they need to be high rise. I believe this includes commercial as well, but there’s only a couple of those going up right now. The majority of building happening in the GTA is residential or mixed residential. m

  • Redwings27 5 months ago

    As of a year ago about fourteen per cent of cranes were used for commercial structures in Toronto. Not a couple.

    • Yuki 5 months ago

      Are you correcting a statement not in the article? At any rate, are they pure commercial or hotel/residential hybrids which we classify as commercial.

      Even at 14%, this is still double the rate of the next city.

Comments are closed.