Construction cranes are intensification in action
As you move around the GTA, you’ve no doubt noticed all the condominium buildings under construction.
As you move around the GTA, you’ve no doubt noticed all the condominium buildings under construction. Does it seem like there are more of them going up today than ever before? And that they are being built in places they’ve never been built before — no longer just downtown, but throughout Toronto and across the 905?
Welcome to intensification in action. The provincial growth plan for the region — put in place back in 2006 — mandated a “grow up, not out” approach to development in the GTA. The implementation of that plan has meant there is less development of traditional single-family homes and more development of high-density homes, such as apartment condominiums.
As of Feb. 28, 2013, there were a record 229 projects under construction across the GTA, accounting for 61,048 units.
Many market watchers worry about who is going to buy those units. In fact, though, 89 per cent of all the units currently under construction across the GTA have already been pre-sold with deposits of at least 20 per cent.
Since the early 1990s, the industry has put in place a number of risk-management practices — such as pre-sale requirements — in order to maintain stability.
Does that mean we’ll have 61,048 new condos flooding the market next year? Definitely not. It takes several years to build a highrise. And it’s not unusual for a larger building to take between three and four years to complete. In the past, with work at full capacity, the industry has not been able to deliver more than 15,000 to 16,000 units in a given year.
But when those units do get delivered, don’t be surprised to find them a bit smaller. The units that will be delivered in the next two to three years are those that were sold after 2009. Since that time — following the introduction of the HST — the index size of a new condo has shrunk by approximately 120 square feet. That’s the equivalent of taking a 10-foot by 12-foot room out of an average condo.
Of course, all of those buildings under construction not only provide a significant benefit for the local economy, they ultimately supply the homes that will house a growing population under the growth plan, albeit in a more intensified form of taller and smaller dwellings.