Toronto Real Estate Is Slow, But It’s Still North America’s Construction Crane Capital

Low rates led to a high rise construction boom, and as they normalize things are slowing. Global real estate consulting giant RLB published the Q3 2022 update to its Crane Index. Toronto has seen a slight pullback from its peak, but the number of cranes is still elevated. High rise construction in Toronto still leads North America by a wide margin. No other city on the continent even comes close.

Toronto Real Estate Slow Down Pulls Some Construction From Peak 

Toronto’s real estate boom led to a building boom, but falling prices have only had a minimal impact. Toronto had 230 construction cranes deployed in Q3 2022, down 9% (22 cranes) from the last quarter. The previous quarter also happens to be a record high, so it’s not surprising to see a little pull back. Even so, there’s really nothing like the city’s construction boom seen in North America. 

Toronto’s Real Estate Boom Has Made It North America’s Construction Capital

Construction cranes used in Q3 2022 in select North American cities.

Source: RLB; Better Dwelling.

You Call That A Bubble? This Is A Bubble 

Other cities seen as frothy, with a large building boom, don’t even compare. Los Angeles, for instance, at 46 cranes in Q3 2022 is the second most active high rise market. That’s 80% less activity than Toronto saw in the same quarter. At the same time, LA home prices are expected to plummet by 20%. That’s likely to kill short-term demand for future high rise projects. 

Following LA are Seattle (42), Denver (32), and Washington, DC (26). All of these cities are noted for their construction boom — it’s just next level in Toronto. 

Toronto’s High Rise Construction Boom Is Mostly Residential

Most of Toronto’s cranes are being used for high-rise construction projects. RLB counted 130 residential cranes in the city, meaning more than half is residential. Soft pre-sale demand might slow that in the near term.

Toronto Real Estate Demand Has Led To A Condo Boom

Construction cranes for residential housing in Q3 2022 in select North American cities.

Source: RLB; Better Dwelling.

In contrast, the next most residential cranes were located in Seattle (36), Denver (23), and Chicago (14). Once again, what’s happening in Toronto isn’t even close to anywhere else. The scale is reminiscent of the 2006 boom in Dubai. Hopefully things work out a little better.

8 Comments

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  • Bernie Bogner 1 week ago

    For those who do not know: Dubai’s condo market has lost 80% of its market value in 2006. However, this market was highly driven by East Indian investors and other investors.

  • Edgar 1 week ago

    See last sentence from the Globe and Mail August 31, 2022
    Population growth and a consumption economy is the only economic strategy we have.

    In February, Prime Minister Justin Trudeau’s government announced plans to boost immigration levels “to help the Canadian economy recover and to fuel post-pandemic growth,” following a sharp drop in the number of newcomers arriving in Canada in 2020. Immigration rebounded in 2021, with a record 405,332 new permanent residents arriving here. And Canada is set to welcome about 432,000 new permanent residents this year, 447,000 in 2023 and 451,000 in 2024.

    National Bank of Canada economists Matthieu Arseneau and Alexandra Ducharme noted that Canada’s population will increase by one million more people by 2032 than Statscan previously projected. Almost all of that extra growth will occur among those aged between 25 and 54 years old – an age cohort that is “crucial to the resilience of consumption and real estate.”

  • Vin R 1 week ago

    Please compare those numbers with current population and polutation growth of each big city in North America.

  • george 1 week ago

    build build build as much as you can…we know these are mainly for investors and alike. Meanwhile locals suffer from pollution, noises, traffic stops and delays caused by this new builds which few can afford it. It sucks

  • Angelo 1 week ago

    How about we compare these cities by value of construction and infrastructure work? Counting cranes is meaningless. Renovation work in NYC has 0 cranes, but is worth huge $

  • Cj 1 week ago

    Construction is a lagging indicator. Most of the capital has been committed years in advance and the projects must finish or else there will be steep legal repercussions. On the flip side, when the economy recovers construction will lag because projects will take several years to get off the ground. The projects you are witnessing now could have started almost 10 years ago depending on the size, (if you include the land purchase, planning and development.)

  • Bob 3 days ago

    Here are the facts. 45% of Toronto condos are rentals. Condos are put up overwhelmingly to satisfy investor demands, both foreign and domestic. The percentage of foreign owner/investors is WAY underestimated because government doesn’t look at actual nationality of the funds source past the apparent ‘buyer’. Lack of government scrutiny is driven by desire to not upset developers and political correctness. Foreign buyers use Canadian real estate to shelter their wealth from hostile regimes in their home countries ie. ‘Canadian safety deposit boxes in the sky’. Canada has far and away the highest immigration rate of the G7 countries and the politicians just want it higher and higher – who cares what the people want. 35% of all immigrants come to the Greater Toronto Area. There’s nowhere for them to live. Developers love this big gifted pool of buyers and renters that drive prices up. Corporations love this surge in the labour pool. Governments love the new taxpayers/voters who now fund their careers, salaries and pet projects and use them to virtue signal their PC values. But it’s not just abnormally-large immigration and three in-town universities addicted to foreign student’s elevated tuitions funding fat cat administrator and professor salaries and pushing rents to the sky because there are no dorms. Oh no. It’s also massive government red tape and taxation and costs that thwart more affordable and rapid construction. A refusal to build either a decent and affordable freeway or mass transit system 50 years ago (damn you Jane Jacobs) that is now killing us (Eglinton crosstown is a trillion dollar bandaid), so everyone needs to live central TO because commuting is impossible. Work from home only having helped a bit recently. Ultimately, it’s all a mess from the politicians. Instead of reigning in immigration to a sane level, reducing construction levies, or allowing construction on new land, the government puts in a green belt and attacks your single-family neighbourhood zoning as ‘selfish’ ‘exclusionary’ and ‘intolerant’ so 4-storey walkups filled with renters will now get plopped down next to your dream house you paid millions for. Oh, but the rich neighbourhoods the politicians live in will be spared you can bet on it. All of these things working in a perfect storm are why your kids, and maybe you, can’t come close to buying a home in Toronto for 3-4 times your salary which used to be the middle-class norm and relatively attainable. This whole circus will end only when there is signficantly reduced immigration, an end to cheap-money borrowing, a major cultural preference away from condo living, a revival of purpose-built rental buildings, a big economic crash, a huge popular political uprising, or some combination of these factors. Condo cost per square foot needs to drop by 50% to around $600 in order for affordability to get reasonable. It was there just ten years ago. Good luck, Canada, and especially Toronto. You’re gonna need it.

  • Art 2 days ago

    50% correction in total. Just wait.

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