Photo courtesy Dryvit

High demand for condominiums—which dominate 50 per cent of Toronto's residential construction activity—has been satisfied. Nevertheless, for 2009, the skyscraper's downfall may not be as significant in Toronto as in Vancouver.

Canada's condominium building boom is spiralling downward, due to diminishing demand, lack of consumer confidence, and tight credit conditions. An increasing inventory of unsold units further discourages developers. Overall residential construction activity was at its slowest pace late last year since 2001, partly because of the ailing condominium sector—condominiums make up 50 to 60 per cent of Vancouver's residential construction and about half of all new homebuilding activity in Toronto.

The decline in condominium building—which fell 29 per cent in a month late last year—also influences related factors such as jobs and retail sales. For example, plans to build more than 1000 condominium units in a mixed-use development in Surrey, B.C., were postponed late last year; these actions will eventually reduce construction jobs as well as the number of household necessities sold, such as ovens, carpets, beds, and bathroom countertops.

In Toronto, the downturn appears to be less dire. In October alone, about 15 new highrise projects opened in the city and surrounding area. According to Stephen Dupuis, chief executive officer of Toronto's Building Industry and Land Development Association (BILD), the city has enough projects for a busy industry this year. However, if sales fall substantially, Toronto might endure significantly less construction activity in 2010.