With our population increasing and the average price for condos in downtown Toronto nearing $1000/sqft, buyers and builders are looking elsewhere for new opportunities and better value. To help understand these shifts, we compiled data on population growth and active builds in Toronto to reveal where developers are breaking ground and how these up-and-coming urban hubs are shaping Toronto’s tomorrow.
2018 begins with record-breaking new builds
In February of this year, there was record-breaking new higher-density development starts in Toronto. According to the Canadian Mortgage and Housing Corporation (CMHC), February had a preliminary total of 5,283 new dwelling starts in high-density housing. These dwelling types include all housing types except single-detached homes. The CMHC defines ‘housing starts’ based on developments that have laid a construction foundation. They use this monthly total to create a rough estimation of yearly totals if the monthly trend were to continue for the whole year. Based on the February trend, 2018 could see 63,396 new higher-density housing starts, though that is very unlikely.
There was an additional 7,635 dwelling starts in February if you include single-detached houses to a total of 71,031 units (seasonally adjusted at annual rates). The overwhelming majority of new starts in higher-density developments clearly reveals Toronto’s demand for new residences in specific, spatially restricted neighbourhoods across the city.
Higher-density housing is needed to meet population growth
The population of Toronto (Census Metropolitan Area) grew by 6.2% from 2011 to 2016, according to Statistics Canada census data.
Where the population has grown in Toronto
Percentage population change 2011–2016 by census tract
Pop. 2016: 5,928,040
Pop. 2011: 5,583,064
% change: 6.2
Note: Percentage change in population can appear more drastic in less populated areas across Toronto.
Source: Statistics Canada
Downtown Toronto continues to be the fastest growing area of the city, but it’s an area that is spatially restricted. Neighbourhoods such as CityPlace, King Street West, and Liberty Village grew by 97%, 103%, and 174% respectively. Downtown Toronto is going to experience huge levels of stress if it continues to absorb so many new residents, so where are people going to go?
Based on population increases, the area around Humber Bay in Mimico is showing significant population growth, increasing 117% from 2011 to 2016.
The housing corridor along the Sheppard Line 4 of Toronto’s subway system has also seen considerable growth of 72% in the Concord Park Place area. As we showed in an earlier blog post on the top-selling condo buildings of 2017, the second best-seller was the Discovery I & II development in North York, along this corridor.
Midtown Toronto along Yonge Street is an area showing steady population growth. Not as dramatic as some other areas, Yonge and Eglinton stands as the main hub for new residents. Centrality of TTC accessibility is clearly a factor impacting where residents are concentrating and wanting to live.
What about population decreases?
The city has also seen population decreases in certain neighbourhoods. Surprisingly, areas around the University of Toronto, the Annex, and Kensington Market decreased by -23.97%. One factor is that since 2011, the average condo PSF for the Annex neighbourhood has grown from $611 to $1,003. That’s a 164% increase. The rising value of real estate is actively pushing residents out of these neighbourhoods. But where are they going?
New builds linked with population growth
In 2017, there were 42,025 housing units under construction across the city of Toronto, according to the CMHC. Of that number, 33,301 units were high-density housing intended for the condo market. That’s over two-thirds of all developments under construction.
Where development is happening
Under construction by intended market, 2017
While many of these condo units are expected to be sold to end-users as primary homes, we know that a large proportion of all condo units sold wind up feeding the rental market as investment properties. The significant proportion of units intended for the condo market is a striking illustration of Toronto’s dependency on high-density condo development to solve its housing issues, particularly in regards to the rental supply. Out of those 42,025 total units, CMHC reports that just 5,938 units were under construction with the intention of directly supplying the rental market. And we wonder why renters are struggling in Toronto!
New builds reveal new urban hubs in Toronto
Downtown Toronto remains the most in-demand area of the city. It’s where most people want (and need) to live, and to that end a lot of new development still occurs within the core neighbourhoods. But downtown is massively constrained when it comes to available land for new builds. Development has been spreading outwards for years. Newer, high density housing, however, is centralizing in a few key areas and creating the foundation for new urban hubs. The new hubs for high-density development that stand out are in North York along Sheppard Ave, at Yonge and Eglinton, and in the Mimico area of Etobicoke.
How new urban hubs will impact the growth of Toronto
It can be exciting to make bold proclamations about the future, but of course no one really knows what might happen ten or twenty years from now. We are definitely not trying to offer any projections like that. It’s possible that these three emerging hubs, North York, Yonge and Eglinton, and Mimico, could become Toronto’s next ‘downtowns’, but who knows.
The concentration of population growth, however, along with centralized new builds in these areas does reveal a trajectory of development towards urban intensification and higher density living. And they say higher-density is the future of Toronto. Many Torontonians are turning away from the idea of urban sprawl and the lifestyle of the automobile. The growth and prominence of these three areas nearby public transportation options and public outdoor space is also suggestive of shifts in living preferences.
It showcases a clear home-buyer preference for higher density ‘vertical-living’ with convenient accessibility to public transit such as the TTC subway and the GO Train routes. Living within reach of recreational green space is also on the table as a major preference for these homebuyers. Torontonians want to enjoy the natural connectivity of the Humber Bay Parks, Martin Goodman Trail, and the ravine systems of the Don River valley that traverse much of the Mid Town and North York areas.
*Disclaimer: Condos.ca has collected data from CMHC, Stats Canada, and the City of Toronto with the highest commitment to accuracy. However, we cannot guarantee the information with 100% certainty due to factors including but not limited to potential incorrect information entered by external sources. This information and the views and opinions expressed here are intended for educational purposes only. Condos.ca accepts no liability for the content of this study.
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