Toronto's condo bubble just keeps growing and growing
Nearly four years ago, when I started on this very blog, the prevailing money story of the day was the Toronto housing market, which was so bloated it would burst any minute.
The question, even then, was: who’s buying these things?
As 2012 comes to a close, visitors to Toronto will notice the cranes haven’t left, and in fact they’ve grown in numbers, making Canada’s largest city the skyscraper capital of the western world.
Indeed, so dotted is Toronto’s landscape with construction cranes it’s gotten the attention of the Council on Tall Buildings and Urban Habitat.
The firm has charted Toronto’s seismic high-rise boom, figuring there are now a whopping 15 skyscrapers under construction that will exceed about 45 storeys in height.
Toronto’s condo craze is “spearheading a countrywide interest in tall building development,” according to the council.
So what the city is left with is a high-rise forecast that might make even Dubai blush. By 2015, there will be an estimated 44 towers exceeding 150 metres in the Big Smoke, more than triple the 13 that stood along Toronto’s skyline in 2005.
Cynics love to point to the boom as the sure sign of overzealous building, and in time they might be right.
But this bubble simply will not burst. Years have passed since the first pundits pointed to Toronto as a market ripe for crash.
Vacancy rates among Toronto’s condos have remained so miniscule (just 1.7 per cent open units in Oct., 2011 across the GTA) that there seemed to be nowhere to go but up.
Yet the latest figures from the Canada Mortgage Housing Corp. show the opposite is true. Over the past year, current to Oct., 2012, vacancy rates for Toronto rentals have actually gone down, below one per cent for condo rentals – all at a time when rent has increased four per cent year-over-year.
Instead of popping, the bubble grows.
By Jason Buckland, MSN Money