| Toronto: Canada's strongest
market faces real estate slump, but long-term prospects are bright
- Area Review |
The Toronto real estate market is in what is perhaps
its biggest slump in more than 50 years. From commercial to residential,
from industrial to retail, vacancy rates are up, rents are down and landlords
are hurting.
The winners are business renegotiating a lease, industries looking
for warehouse or factory space or renters of residential properties.
Toronto, which once had the lowest office vacancy rate in North America
and where apartment vacancies ran at 1% during the 1980s, has now become
a buyer's market. Trouble is, there aren't many buyers.
David Ellis, who studies the market for Royal LePage in Toronto, Canada's
largest commercial broker, brings it down to simple economics. "Supply
has mushroomed as demand has declined," says Ellis. "We went
through the same thing in 1981-82, but this is worse."
The vacancy rate in the downtown core is 16.3% just three years ago
it was as low as 4%. And Ellis predicts the vacancy rate could "spike
as high as 18% by 1994."
Toronto's real estate woes aren't going to get better in a hurry, but
they aren't going to last either. And it is more than just wishful thinking.
Toronto has a unique place in Canada's economy -- the metropolitan area
makes up 15% of Canada's gross national product.
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