Toronto's Skyline Has High Ambitions Despite Housing Bubble Concerns
According to a new study by German data-provider, Emporis, Toronto leads the way in North American construction markets, far outpacing New York City in new tower construction. Though Toronto holds the number one spot, five other Canadian cities occupy spots in the top ten. "[T]he study shows that Montreal has more towers in construction than Chicago, and that Calgary is tied with Miami," reports Tara Perkins. Vancouver, Ottawa, and Richmond, B.C. also made the list.
Though Toronto's well-recognized "condo boom" has been responsible for much of that city's recent development, "[a] small but notable portion of Canada's strong showing comes from a new wave of office construction," says Perkins. So, what's prompting all this building in America's northern neighbor? Several studies point to a combination of higher rents and low vacancy rates in Canada's most populated city, Toronto, as well as in smaller urban areas, such as downtown Calgary.
Fearing the formation of a housing bubble, Canadian Finance Minister, Jim Flaherty, has "sought to cool the market by tightening up the country's mortgage insurance rules." He was primarily concerned "that low interest rates might have been spurring more construction than the market could absorb," writes Perkins. "Mr. Flaherty has sought to balance the need to bring house prices and mortgage debt under control with the need to keep the economy humming." As Toronto condo prices fall, and resale prices level out, so do Mr. Flaherty's fears, reports Perkins.