Builders Counting On Toronto Housing Recovery

real estate construction

Toronto’s population may be flat, but that hasn’t stopped the region’s developers from building apartments in the country’s financial capital at near record levels.

Bloomberg News reported 13,358 units were under construction in the Toronto area in the second quarter, a nearly 40-year high, according to research from Urbanation Inc., the Toronto-based real estate consulting firm.

In addition, more than 3,000 new apartments were proposed in the second quarter, a 45 percent increase from the same period in 2019.

An infusion of immigrants, international students and growth in the finance and technology sectors have spurred a 10-year building boom. The growth has resulted in a vacancy rate of about 1 percent, making it tough for apartment seekers to find a home, Urbanation said.

The number of vacant apartments increased to 2 percent since the onset of COVID-19 as international students returned to their native countries and foreigners were largely unable to enter Canada due to travel restrictions.

The Financial Post reported Canada could see 170,000 fewer permanent residents entering the country this year.

“If these restrictions last all summer, we expect to see in 2020 than planned,” the Royal Bank of Canada told The Post. “All in a year in which Canada was supposed to welcome a record number of newcomers.”

But builders insist they are not planning to slow construction.

“The market will absolutely bounce back,” Jared Menkes, executive vice-president of Menkes Developments, the Toronto luxury real estate developer, told Bloomberg.

Urbanation President Shaun Hildebrand said while construction underway today was planned years ago, new development proposals continue to be filed, the news service reported.

“Developers are looking at the market with a long-term horizon…,” Hildebrand told Bloomberg. “There’s an understanding that over the longer term, immigration will rebound, the job market will recover and rental demand will ultimately continue to exceed the amount of new supply that’s being delivered.”

Last week, CEO Sheryl Palmer of the Arizona-based Taylor Morrison Home Corp. said health is driving decision-making on home purchases, along with the need for more space, historically low interest rates and the reality of people moving out of cities.

In May, PYMNTS reported a new service called Digital Main Street ShopHERE, powered by the Schulich School of Business In Toronto aims to help small companies and artists move their businesses online.

The initiative will provide small and medium-sized businesses (SMBs) with aid in establishing online stores within days, setting up eCommerce payment channels for eCommerce and activating the stores on several digital marketing platforms.