Toronto has the most number of active cranes, and apparently by a large margin according to the RLB Crane Index. Yes… there is actually such a thing as a crane index! According to the RLB Crane index, Toronto currently operates 120 active cranes out of the 428 used in North America. That’s a solid 28% of all cranes in North America, which likely explains all of the traffic going on downtown in the summer time. If you are a connoisseur of data, here is the Crane Index Report from RLB.
This is probably not a surprise to most, as we know that Toronto is now the fastest growing city in all of North America. So, Toronto having the most number of active cranes makes total sense.
Big Surge! What is interesting is that, a little less than 1 year ago, Toronto only had 95 active cranes (August 2018).
Within 1 year, Toronto increased its active crane count by 30, or in other words, a 33% increase – WOWza!
So the question on your mind may be: “Is Toronto OVER Building?” Well, the answer is No.
Numbers Tell the Story – A simple math problem of 150,000 people immigrating to Toronto with only 20,000 homes finishing per year means that 7.5 people must fit into a home in the upcoming few years. There is no way that 7.5 people are fitting into a condo unit in Toronto. Just imagine that – 7 people confined into a 500 square feet unit. That thought may seem crazy now, but that’s actually how Hong Kong and Tokyo are right now.
To highlight what this actually means, allow me to illustrate a simplified version of the development process of a high-rise condo right now.
Delayed Effect – You can see from the chat that I created above that it takes roughly 4 years into the development process before cranes are installed. This means that all of the cranes being installed right now are from the sales of pre-construction condo units sold in 2017. Yes, I know where the new cranes are and yes, we sold those sites 2 years ago.
2017 saw a major boom in pre-construction condo sales. However, 2018 experienced the biggest dip in the last 10 years, a 42% drop to be exact.
This means that in the next 2-3 years, there will be a slow down in cranes going up in our skyline, and then ultimately a slowdown in occupancy. There is always a 5-7 year delay with supply and demand in condos solely because of the time that it takes to build one of these tall skyscrapers.
The Wrap – Our demand is so high right now and the sales have just dropped. With the population expected to double in 20 years and cranes to slow down in the next 4 years, you know what that spells. My 2 most spoken words in the past 6 months is NO SUPPLY. Furthermore, you know what no supply combined with high demand translates to… you guessed it – increased prices! That’s why the largest home grab is going to be happening in the next few years. Whether you know it or not, Toronto has a very good chance of seeing another 10 years of boom. Obviously, not every pre-construction project is worth the investment. If you want to profit from the condo market, here is a free course that I put together for you. You can get the FREE videos by signing up here:
If you want more specific answers to your personalized questions, please reach out to me, Zhen, at Zhen@PrimePropertiesTO.com.
Until Next time, Happy Real Estate-ing