Has the Toronto building boom peaked?

[isaidso]

Toronto's building boom started around 2007. By 2011 people started questioning how much longer the frenetic pace of construction could continue. Was there a real estate bubble forming? The issue has been analyzed to death over the years and steps made to take some froth out of the market to avoid a potential crash.

The scale of Toronto's tower boom is due to a perfect storm of factors. First was the formation of the Green Belt and 'Places to Grow'. It protected rich farmland on Toronto's northern periphery and looked to curb sprawl. Intensification was encouraged rather than growing the footprint of the city.

The golden horseshoe is one of the fastest growing regions in the western world and has been for decades. It adds 100,000+ people annually so what one's seeing is a growing % of that demand being satisfied with midrise and highrise developments. Urban planning policies have been designed with the goal of increasing population density and supporting development that's geared around transit.

A 3rd contributor has been the cultural shift happening right across Canada. People still covet a house with a yard but the younger generation covets downtown living more. With real estate prices what they are and supply limited, the only option downtown is a condo. There's so much money up for grabs that developers are upping their game when it comes to design to lure buyers. Price discounts don't happen here and condo proposals need to be 80% sold to proceed. I might be wrong about the exact number but it's around there.

There's also some validity to the idea that Toronto is still in the process of assuming its place at the head of the Canadian table. Montreal, for most of our history, was the nation's economic, political, and cultural power base. It's where the old money resided and accrued all the perks that go along with that. Toronto surpassed Montreal in size in the late 70s but it will take a few more decades till Toronto fully grows into its 'new' role. It's starting to sink in that what's occurring in Toronto isn't a normal real estate cycle. The level of development is the new normal.