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December 2022 ended a sluggish year in new applications, with a second-lowest number of new proposals submitted since 2017.
UrbanToronto Pro's December, 2022 report indicates a substantial slowdown in applications compared to the same period last year. In December, 2021, a total of 39 applications were submitted, while in December, 2022 there were only 28. This drop of 28% is indicative of a slowdown in the development cycle and may be concerning for stakeholders. Similarly, there were 84 buildings proposed in December, 2021 but only 37 buildings proposed in December, 2022, representing a 56% decrease from the previous month.
Typically, December is one of the most active months of the year in terms of new applications. One major reason for this is that development charges usually increase beginning in January, so there is a rush of proposals trying to avoid the bump in fees. However, while there was a large increase in applications from the previous month, it is still a muted response compared to previous years.
In terms of parking spots, 5,001 parking spots were proposed in December, 2022 as compared to 13,035 parking spots proposed in December, 2021 - a 61% decrease. The ratio between parking spots and dwelling units was nearly identical year-over-year, from 0.66 parking spot per unit proposed in December 2021 to 0.69 parking spot per unit proposed this month.
When looking at projected square footage numbers, there was an 82% decrease in total gross floor area (GFA) between December last year and December this year: 16 million square feet versus 6 million square feet respectively. The site area metric saw a major increase this month with 4.8 million square feet being proposed versus 4.3 million last month - up 12%. However, the floor space index (FSI) metric saw a dramatic decline of 66%, dropping from 3.86 FSI last months to 1.32 FSI this month. These surprising metrics are largely driven by the Therme Spa/West Island at Ontario Place, an unusually large and low-density proposal. Removing this outlier, the proposed FSI of the remaining buildings jumps up to 4.15, suggesting more density in projects this year compared to last.
In terms of applications, there were 39 applications proposed in December, 2021 while only 28 applications were proposed in December, 2022 - a drop of 28%. This is the lowest number of applications proposed since 2017. Similarly, there were 84 buildings proposed in December, 2021 but only 37 buildings proposed in December, 2022, representing a 56% decrease from the previous month.
In terms of parking spots, 5,001 parking spots were proposed in December, 2022 as compared to 13,035 parking spots proposed in December, 2021 - a 61% decrease. The ratio between parking spots and dwelling units also decreased from 0.66 parking spot per unit proposed in December, 2021 to 0.69 parking spot per unit proposed this month - down 4%.
There were 7,277 units proposed in December of 2022, down from last year's 19,822 unit. However, despite this 63% decrease in the number of units, the residential GFA per unit was virtually unchanged: 798 ft² per unit this year, compared to 790 ft² per unit in December 2021. Since the number of units is decreasing, as are the prices that developers are offering, but unit sizes are staying constant,
Overall, these numbers demonstrate how the Bank of Canada's interest rate policy has drastically affected housing market trends over the past year on multiple fronts: not only are home buyers being affected, but developers are also shifting their focus towards smaller scale projects with less risk involved.
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For more information about UTPro, contact Edward Skira.
