Soon Toronto will have more condos than people

New research by Bank of America Merrill Lynch suggests Toronto is building too many condos for its own good, and the booming market could bust soon. “We think investors are underestimating the wall of inventory about to come on the market in the next 12 to 24 months,” write economists Ryan Bohren and Sheryl King in the report. Indeed, last month Toronto had a third more high-rises under construction than Mexico City or New York—both of which have well over three times T.O.’s population. John Pasalis, president of Realosophy Realty, wrote on his company blog that the most important condition for a bubble is in place: blind, aggressive investors. He believes expensive condos (outside of Yorkville) are most vulnerable to a lack of demand, as shown by the poor resale figures at Festival Tower and the Ritz-Carlton. Not all signs point to disaster, however: according to sources quoted in the National Post, the rental vacancy rate in Toronto was just 1.6 percent in April (versus the national rate of 2.5), and the current building blitz could be compensating for a drop in small-scale construction. Whatever the result, the cityscape is about to get a lot taller. Read the entire story [National Post] »