Photo: Anthony Bailey/Flickr
The construction crane may as well be the de facto symbol of Toronto with new buildings going up in just about every corner of the city. Although March data from Statistics Canada suggests that Ontario’s construction explosion is petering out after several big years for building, there’s still plenty of activity going on in Toronto’s condo market today. New projects are breaking ground in the upper reaches of North York all the way to the western waterfront.
As of May 5th, there were 44,589 units under construction in the city. Using our Market Snapshot tool, we’ve crunched the numbers to find out which 10 neighbourhoods are seeing the highest construction concentration in the city.
In first place, the Entertainment District has a staggering 5,565 condo units under construction. That’s roughly 12 per cent of all the units being built city-wide. This particular market won’t be letting up any time soon with 2,651 estimated completions scheduled for 2014 and 2,180 suites scheduled for 2015 so far.
There were two notable trends among the top five neighbourhoods: subway and waterfront access. In a city where residents spend an average of 65.6 minutes a day commuting, it’s no shock that builders are locating so many of their projects along major transit lines. Our number one neighbourhood, the Entertainment District, borders the Yonge-University-Spadina line, as does Church and Wellesley, number three on our list, as well as Willowdale, which takes the fourth spot.
Whether it’s downtown or the west end, condo units are also popping up all over the waterfront. Humber Bay took second place, with a total of 3,489 units currently under construction while Harbourfront came in fifth with 2,328 units.
As more of these suites come online this year and in 2015, we can’t help but wonder what the impact will be on the rental market given that a large number of units are bought by investors and leased. According to the 2013 fall rental market report by the Canada Mortgage and Housing Corporation (CMHC), 27.6 per cent of Toronto condos are in rental.
“The 5,565 suites under construction in the Entertainment District make up about 12% of all the units currently under the construction in Toronto.”
And it looks like more and more suites in the city are taking that route. In the first quarter of 2014, the Toronto Real Estate Board (TREB), reported year-over-year double digit gains for both condo leases and listings on MLS. The number of condo units leased increased by 17.8 per cent, with the number of condo rental units listed on the MLS climbing an astonishing 27.7 per cent from 2013.
All that extra supply translated into more choice for renters and a slight easing in prices. During the first quarter, the average monthly rent for a one-bedroom condo in Toronto declined by 1.6 per cent to $1,573 per month.
TREB’s Central Toronto C01 district, which spans Bloor Street south to the waterfront and Yonge Street and Dufferin Street to the east and west, respectively, saw the most rental activity. It counted 3,751 units listed and 1,659 units leased in the first quarter. The district includes many of the neighbourhoods on our top 10 ranking such as the Entertainment District, The Annex and Trinity-Niagara.
According to TREB, there were 3,751 condo units listed on MLS in the first quarter and 1,659 leased in the construction-heavy C01 district. Compare that to the first quarter of 2012, when 2,038 condos in C01 were listed for rent and 1,194 condo suites were leased.
Does that mean rental prices will continue to moderate as more units come online? We’ll just have to wait and see.
To get a better sense of the neighourhoods at the core of the building boom, check out our infographic below:
The top 10 neighbourhoods:
1. The Entertainment District
2. Humber Bay
3. Church and Wellesley
7. Yonge and Eglinton
8. St. Lawrence
9. The Peanut (Don Mills and Shepphard)
10. The Annex