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Development activity in the Toronto area has no doubt slowed down greatly compared to the pre-2020 highs, but there is still activity nonetheless. And UTPro provides the best way to track the development pipeline from application to construction in the Greater Golden Horseshoe. Here's our review of some of the data from the year and comparison to previous years.
If you have a hand in the growth of the region, understanding when, where, and how new development is happening is crucial to your business. This is why we created UTPro, our premium database service, to reliably provide data on every new real estate development in the Greater Golden Horseshoe.
The development pipeline can be broken down into three stages: 1) the application stage; 2) the construction starts; and 3) construction completions.
In terms of applications, UTPro tracks new projects that are larger than a detached house in footprint: this includes not just residential projects from townhouses to skyscrapers, but also retail and office buildings, schools and government buildings, parks and warehouses, as well as public transit stations.
2024 saw many new policies municipally, provincially, and federally aimed at promoting more housing construction. Federally, the biggest change came from the Bank of Canada, which lowered interest rates five times this year. Although rates are still higher than they were in 2019, the relatively lower interest rates enable more borrowing and thereby more construction.
Moreover, the trend of lowering rates gives more confidence to developers to firm up plans to submit new proposals for construction.
Additionally, 2024 was the first full year of the federal announcement that purpose-built rental construction would see a break on HST paid on construction materials. Since a rental unit and condo unit are essentially made of the same materials and land, in effect this incentivizes a shift in construction from condos to rentals.
Provincially, the biggest news of the year was the Cutting Red Tape to Build More Homes Act. This complicated piece of legislation included many moving parts. Perhaps most significant were the moves to accelerate increases to development charges, while also introducing measures intended to accelerate the timelines between submitting an application and having it approved.
Locally, Toronto City Council’s biggest move was accepting millions of dollars from the Federal government’s Housing Accelerator Fund. Beyond this, was adopting the zoning by-law changes recommended in the “Major Streets Study,” which would effectively allow 6-storey residential buildings on so-called “major streets” in the city. The changes are currently under appeal.
To that end, the City of Toronto saw 149 applications for new projects. This includes 63,752 residential units and 56 million square feet of Gross Floor Area (GFA) to be built on top of 34 million square feet of site area. For context, High Park is roughly 17 million square feet.
This was actually an improvement over the previous year, which saw 140 applications, proposing 56,365 residential units, 45 million square feet of GFA, and 17 million square feet of site area.
In effect, Toronto developers in 2024 have proposed to house an extra 10,000 people on an extra High Park compared to 2023.
Construction starts, however, were less optimistic. In 2024, construction began on only 11,842 units in the City of Toronto proper, roughly half of the 22,790 of the previous year. As mentioned above, interest rates are still high relative to the pre-COVID levels. Since the trend is continuing to decrease, perhaps developers are waiting for even lower rates before beginning their construction in earnest.
Completions, curiously, had the opposite trend: 21,840 units completed in Toronto in 2024, compared to 11,952 completed in 2023. Perhaps with interest rates falling, developers were moving quickly to close on units under construction.
We can look at the trends beyond Toronto, too. Across the Greater Toronto and Hamilton Area (GTHA), total applications declined by nearly 7%: from 280 in 2023, to 262 in 2024.
Looking at only the regions of Peel, Halton, Durham, York, and Hamilton, only 88,773 units were proposed—a drop of 15% from 104,197 proposed in 2023. Unlike Toronto, there was however an uptick in new construction activity: construction began on 15,623 units in these regions this year, up 28% from the previous year's 12,152 units. Similarly, 15,504 units were completed outside of Toronto in the GTHA this year, compared to 9,790 completions last year.
In summary, 2024 may have been an inflection point. More applications and more completions of housing in Toronto than in previous years indicate both long-term and short-term optimism. While the economic situation is still fragile, with GDP now down for the seventh consecutive quarter, housing construction in all stages may be on the rebound. Hopefully, 2025 will have even more good news.
Whether you’re a developer, planner, or investor, UTPro offers the data needed to track growth patterns and seize new opportunities. Explore the full capabilities of UTPro to see how its powerful insights can support your vision for the future of the Greater Golden Horseshoe.
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