There was a Toronto real estate slowdown? Hard to notice with busy construction sites blanketing the city. The latest RLB Crane Index, tracking 14 key North American cities, shows crane use grew in Q1 2023. Toronto remains the reigning king of cranes, with almost 5x more than the next city on the list.
North American Cities Generally Saw More Building Activity Rise
North American construction cranes have been climbing despite the challenging environment. The Crane Index showed a 7% increase in Q1 2023, with most projects being mixed-use or residential. Only two cities, New York City and Chicago, saw the number of cranes reduced.
Considering how many factors are working against new developments, it can be surprising. High construction costs, scarce labor, and a dim economic outlook aren’t exactly builder-friendly. However, it’s worth nothing that large construction projects generally require years of planning. Cheap leverage is still working its way through the system.
Residential projects in some cities have reported weak sales in the past few months. That’s resulted in new projects being canceled, delayed, or indefinitely put on hold. Today’s data wouldn’t reflect this, but it can impact future project counts. For now, investors fueled by cheap leverage are still working their way though the system.
Toronto Real Estate Remains The King of Cranes
Speaking of exuberant real estate investors—there’s still no other city like Toronto. It has a whopping 238 cranes deployed in Q1 2023, up 8 from the previous report. Even RLB appears to be shocked, noting the data includes 31 projects completed in the past 6 months. Toronto keeps the Crown for most construction cranes in North America, and may even top the world.
Nothing Is Even Close To Toronto, Next City Less Than A Quarter of The Cranes
Seriously, no other North American city has even close to the number of cranes as Toronto. Seattle (51 cranes) is the second on the list, with nearly a fifth as many. It’s followed by Los Angeles (47), and Denver (36), where the drop off in crane count really stands out.
Only one other Canadian city makes RLBs tracked list, and that’s Calgary (20). All of the above cities are very active markets when it comes to building. They only look slow in contrast to Toronto, which also happens to top the UBS Bubble Index.
RLB expects building activity to remain elevated throughout the year, despite continued hurdles. Most cranes were attached to residential projects, which are typically pre-sold. Even in the event of a sharp downturn, this reduces the risk of spec building seen in 2008. Though it’s hard to see how next year can maintain the same momentum.