Low rates led to a high rise construction boom, and as they normalize things are slowing. Global real estate consulting giant RLB published the Q3 2022 update to its Crane Index. Toronto has seen a slight pullback from its peak, but the number of cranes is still elevated. High rise construction in Toronto still leads North America by a wide margin. No other city on the continent even comes close.
Toronto Real Estate Slow Down Pulls Some Construction From Peak
Toronto’s real estate boom led to a building boom, but falling prices have only had a minimal impact. Toronto had 230 construction cranes deployed in Q3 2022, down 9% (22 cranes) from the last quarter. The previous quarter also happens to be a record high, so it’s not surprising to see a little pull back. Even so, there’s really nothing like the city’s construction boom seen in North America.
Toronto’s Real Estate Boom Has Made It North America’s Construction Capital
Construction cranes used in Q3 2022 in select North American cities.
Source: RLB; Better Dwelling.
You Call That A Bubble? This Is A Bubble
Other cities seen as frothy, with a large building boom, don’t even compare. Los Angeles, for instance, at 46 cranes in Q3 2022 is the second most active high rise market. That’s 80% less activity than Toronto saw in the same quarter. At the same time, LA home prices are expected to plummet by 20%. That’s likely to kill short-term demand for future high rise projects.
Following LA are Seattle (42), Denver (32), and Washington, DC (26). All of these cities are noted for their construction boom — it’s just next level in Toronto.
Toronto’s High Rise Construction Boom Is Mostly Residential
Most of Toronto’s cranes are being used for high-rise construction projects. RLB counted 130 residential cranes in the city, meaning more than half is residential. Soft pre-sale demand might slow that in the near term.
Toronto Real Estate Demand Has Led To A Condo Boom
Construction cranes for residential housing in Q3 2022 in select North American cities.
Source: RLB; Better Dwelling.
In contrast, the next most residential cranes were located in Seattle (36), Denver (23), and Chicago (14). Once again, what’s happening in Toronto isn’t even close to anywhere else. The scale is reminiscent of the 2006 boom in Dubai. Hopefully things work out a little better.
