Toronto's Falling Housing Starts and the Condofication of a Metropolis
Housing supply in Toronto has become increasingly skewed towards high-rise, multi-family (apartments and condominiums) dwellings, with a notable decline in other types of residential construction. The accompanying chart illustrates this trend, highlighting a sharp rise in apartment construction since the Great Recession of 2008–09. In contrast, ground-oriented housing, especially single-detached homes, has experienced a sustained decline since the mid-2000s. Construction of other ground-oriented options, such as semi-detached and row housing units, has remained subdued, averaging fewer than 500 monthly starts. This supply imbalance underscores a pronounced shift towards vertical living in the city, as new development has not matched the demand for traditional single-family homes.
The recent downturn in housing starts is, in large part, a story of dwindling condominium construction. The steep decline observed in aggregate housing start statistics can be attributed primarily to the dramatic drop in high-rise projects, as shown in the accompanying figure. Since high-rise construction represents the bulk of new residential units in Toronto’s urban core, this contraction in supply signals a potential future shortage of available units, particularly in the city's downtown and surrounding central areas. This trend is especially concerning given Toronto’s steady population growth and rising demand for urban housing.
As housing starts slow, especially for high-rise dwellings concentrated in Toronto’s core, the supply-side constraints will likely intensify. With fewer new units entering the market, the city will likely face an even more significant imbalance between supply and demand in the coming years. The current dip in construction activity may exacerbate affordability challenges, as limited availability will drive up prices, particularly in the central areas where demand remains strong, which contrasts with the falling prices of the newly built downtown-centric condominiums. This evolving housing landscape raises essential questions about Toronto's future urban planning strategies and the need for policies that encourage a more balanced and sustainable local and regional housing mix.
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1moThere is an urgent need for balanced urban planning that not only supports high-density living but also addresses the demand for diverse housing types. Without this, Toronto risks deepening its housing affordability crisis amid growing population pressures.
Writer and Analyst
1moMany authors have highlighted the drastic increase in development charges. I also find the development process takes very long for no discernible reason. For example, I live near Birchmount and Sheppard and by the south - west corner, a developer proposed a 9 storey residential building in 2021. The project still hasn't reached the public consultation phase but there is a 120 page traffic study about it on the city's website. Shouldn't a project like that be approved or refused in 3-6 months?
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1moWe are in a crisis and years away from a fix impacting the market
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1moIn terms of a market shift to condos it is clear and direct impact of Places to Grow and Greenbelt that was introduced in 2005 - see how low rise and rise flipped after that - this has been happening by design except the homebuyer has t really flipped
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1moBuilding the condo for livable size and function may help. Most condos are built for investors and renters. Times have changed, build for tomorrow.