City of Vaughan

Highlights

• Vaughan ranked ninth nationally by the value of industrial building permits and tenth by the value of commercial building permits at the end of the third quarter of 2024.
• When looking at only Ontario, Vaughan ranked fifth by value of industrial building permits, and seventh by value of non-residential building permits over the same period.
• The city’s non-residential permits totaled more than $643 million in permit value at the end of the third quarter after a significant increase of activity in the third quarter.
• This quarter, the non-residential market had the slowest quarterly growth in construction costs since the fourth quarter of 2020.
• The commercial market in the Greater Toronto Area (GTA) recorded increased leasing volumes and shifts to model suites and smaller leasing footprints driven by transit access, amenities, and lease flexibility.
• The industrial market in the Greater Toronto Area (GTA) rebounded with positive absorption in the third quarter of 2024, with a slight shift in demand for more design-builds as a contributing factor.
• Vaughan remains the largest industrial market in York Region, with more than 100 million square feet of industrial inventory.

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As an economic indicator, building permit values measure current demand in both residential and non-residential real estate markets and estimate future performance of the construction industry. Building permit activity is one indicator of the strength of the local economy, as well as a predictor of population and employment growth.

By the end of the third quarter of 2024, Vaughan ranked ninth nationally by value of industrial building permits.

Vaughan’s industrial sector continues to thrive, reflecting its importance in the national development landscape. At the end of the third quarter of 2024, Vaughan ranked ninth nationally by value of industrial building permits.

Top Ten Canadian Industrial Markets by Value of Permits, Q1-Q3 2024:

1. Toronto
2. Windsor
3. Brampton
4. Vancouver
5. Winnipeg
6. Edmonton
7. Montréal
8. London
9. Vaughan
10.  Mississauga

Vaughan remains the largest industrial market in York Region with more than 100 million square feet of industrial inventory.

With more than 100 million square feet of industrial inventory, Vaughan has the largest industrial market in York Region. The city represented 61 per cent of the total industrial inventory in York Region at the end of the third quarter [1].

When looking at only Ontario, the city ranked fifth by value of industrial building permits.

In the third quarter of 2024, Vaughan ranked in the top five census subdivisions by construction value of industrial building permits when looking at only Ontario. The city ranked fifth after Toronto, Windsor, Brampton, and London.

Top Ten Ontario Industrial Markets by Value of Permits, Q1-Q3 2024: 

1. Toronto
2. Windsor
3. Brampton
4. London
5. Vaughan
6. Mississauga
7. Markham
8. Oakville
9. Kitchener
10.  Ottawa

Vaughan’s national recognition for its development activity also extended to commercial development, ranking tenth by value of commercial building permits in Canada at the end of the third quarter of 2024.

By the end of the third quarter of 2024, Vaughan ranked tenth nationally by the value of commercial building permits, making it one of the leading development markets in the country. Commercial building permits include both office and retail buildings.

Top Ten Canadian Commercial Markets by Value of Permits, Q1-Q3 2024: 

1. Toronto
2. Montréal
3. Calgary
4. Mississauga
5. Vancouver
6. Edmonton
7. Surrey
8. Brampton
9. Ottawa
10.  Vaughan

The city’s non-residential permits totaled more than $643 million in permit value at the end of the third quarter after a significant increase of activity in the third quarter.

Until the end of the third quarter in 2024, Vaughan’s non-residential permits totaled more than $642 million in permit value. This is almost double the combined non-residential permit value of nearly $364 million from the first and second quarters of 2024. Non-residential includes industrial, commercial, and institutional permits.

In Ontario, Vaughan ranks seventh overall by value of all non-residential building permits.

According to recent data released from Statistics Canada cumulative to the end of the third quarter of 2024, Vaughan ranks seventh overall when looking at only Ontario by the value of non-residential building permits. Vaughan’s ranking across all non-residential activity in Ontario comes after Toronto, Brampton, Mississauga, Windsor, London, and Ottawa.

Top Ten Ontario Non-Residential Markets by Value of Permits, Q1-Q3 2024:

1. Toronto
2. Brampton
3. Mississauga
4. Windsor
5. London
6. Ottawa
7. Vaughan
8. Kitchener
9. Hamilton
10.  Pickering

The industrial market in the Greater Toronto Area rebounded with positive absorption in the third quarter of 2024, with a slight shift in demand for more design-builds as a contributing factor.  

After significant negative absorption recorded earlier in 2024, industrial absorption has rebounded from negative 884,000 square feet to 2.5 million square feet in the third quarter of 2024 – this represents a total increase of nearly 3.4 million square feet[2]. The Greater Toronto Area (GTA) industrial market is slightly shifting to more design-builds as landlords and developers look to provide mutual security before construction. This leads to higher absorption as new supply coming to market already has tenants secured.

The GTA commercial market records increased leasing volumes and shifts to model suites and smaller leasing footprints driven by transit access, amenities and lease flexibility.

In the third quarter of 2024, the commercial market in the GTA saw a notable transformation, with increased leasing volumes this year. The demand in the leasing market is shifting to model suites, with transit access, amenities and lease flexibility contributing to smaller leasing footprints[3].

This quarter, the non-residential market had the slowest quarterly growth in cost of construction since the fourth quarter of 2020.

Non-residential building construction costs rose 0.5 per cent in the third quarter, following a 1.4 per cent increase in the previous quarter. This marks the slowest quarterly growth since the fourth quarter of 2020. Year-over-year with the same period, non-residential building construction costs increased 3.9 per cent. The industry continued to face cost pressure from skilled labour shortages, land prices and availability, and building code changes, according to builders nationally[4]

[1] Q3 2024 Toronto Industrial Market Report. Colliers.

[2] Q3 2024 Toronto Industrial Market Report. Colliers.

[3] Q3 2024 Toronto Office Market Report. Colliers.

[4] Q3 2024 Building Construction Price Indexes. Statistics Canada.

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Definitions

Industrial buildings are defined as buildings used in the processing or production of goods or related to transportation and communication.

Commercial buildings are defined as buildings used in the trade or distribution of goods and services.

Institutional buildings are buildings used to house public and semi-public services, such as those related to health and welfare, education, or public administration, as well as buildings used for religious services.

Residential buildings are defined as buildings intended for private occupancy whether on a permanent basis or not. Dwellings are divided into the following types: single-family, mobile, cottage, semi-detached, row house and apartment building.

Non-Residential buildings are all buildings not intended for private occupancy whether on a permanent basis or not. This includes buildings used for institutional, commercial, or industrial purposes.

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Economic Development monitors economic trends, including non-residential market conditions. To stay up to date on the latest, following us on LinkedIn at Vaughan Economic Development  or visit vaughanbusiness.ca/Insights