As Toronto took the lead ahead of other North American cities with the most active building cranes, the cost to build homes in the city continues to climb.
According to Rider Levett Bucknall’s recently-published (RLB) Crane Index for Q1-2022, Toronto has the most operating cranes out of 14 major cities across the United States and Canada. The bi-annual RLB Crane Index tracks the number of fixed cranes on construction sites and provides a “simplified measure of the current state of the construction industry’s workload in each location.”
Since this time last year, Toronto has reported a 21 per cent increase in cranes. From the previous survey, Toronto’s crane count jumped 12 per cent even as project completions took away 18 cranes, according to the Index. The commercial sector was mostly responsible for the recent growth as 18 cranes joined the skyline, while residential and mixed-use projects also added a total of seven cranes. Toronto has held onto its title as the city with the most cranes since 2015.
Out of all of the cities analyzed, the RLB Crane Index reported five cities that experienced an increase in cranes, while six stayed the same and cranes fell between 20 per cent to 26 per cent in the remaining three cities. Overall, there has been a 4.5 per cent increase in cranes in North America from the previous edition of the Index. Residential cranes make up half of the cranes in use these days.
“We expect the crane count to remain steady, as many projects are experiencing delays in their schedules due to supply chain issues and construction costs continue to climb up, giving some developers hesitancy to break ground at this time,” said the Index’s report.
Construction cost indexes rise in Toronto and Calgary
Days after the latest RLB Crane Index was published, RLB released its Q1-2022 quarterly construction cost report for North America, which includes cost analysis for Calgary and Toronto.
The Comparative Cost index for Calgary has grown 9.82 per cent yearly and 13.47 per cent annually in Toronto. The Cost Index tracks the ‘true’ bid cost of construction, which includes labor, fees and material costs.
Per square foot, current residential building costs are now estimated between $190 and $255 for a multi-family home in Toronto and $255 to $485 per square foot for a single-family residence. In Calgary, indicative costs are slightly lower, with multi-family construction expenses ranging from $170 to $230 a square foot, and $250 to $370 per square foot for single-family residences. The biggest construction cost drivers are softwood lumber, wood products and energy or petroleum, which reported a 47.7 per cent, 20.5 per cent and 1.6 per cent increase in both cities from Q4-2021.
In Ontario, contractors are expecting an average increase of 10 per cent in revenue this year, but “sluggish,” labour force growth has been creating challenges in the province. Rising prices, project cost escalation and supply chain issues continue to be a concern in the industry.
Thanks to the 2022 Capital Plan, Alberta will invest $21 billion towards the construction of roads, schools and hospitals over a three-year period. Meanwhile, RLB noted that housing continues to be a major economic engine in Ontario.
“This is the case not only in the province’s major urban areas but also in smaller communities where an influx of big-city migrants sustains solid demand,” said the report. “The Greater Toronto Area (GTA) condo market outside of the core continue to perform well because their price points allow additional buyers to enter the market. The GTA housing sales are expected to surpass the long-year-average in 2022.”
