Toronto's condo market is facing a worsening crisis
The Greater Toronto and Hamilton Area (GTHA) condominium market posted its weakest quarterly performance in over three decades, with just 533 new condo sales recorded in the first quarter of 2025 – a 62% decline year-over-year, according to new data from Urbanation.
The Q1 figures mark the lowest new condo sales total since 1995. In the City of Toronto, only 215 new units were sold, the fewest since 1990. Urbanation attributes the downturn to persistently high interest rates, oversupply – particularly of smaller units – and increasing financial uncertainty fuelled by trade tensions with the United States.
“The new condo market is currently working through its most challenging period to date, which has become further impacted by the uncertainty and cost escalations caused by the trade conflict with the US,” said Urbanation president Shaun Hildebrand.
Stalled activity, falling prices signal buyer hesitation
Only two new condo projects launched for presale in the GTHA during the first quarter, continuing a trend of postponed, cancelled, or converted developments. Over the past year, 28 projects – totalling 5,734 units – were either shelved or transitioned into purpose-built rental housing. Four of those projects, representing 1,042 units, were pulled in Q1 alone.
The slowdown has also led to falling prices. The average selling price for new condos declined by 7% year-over-year to $1,151 per square foot (psf), down from $1,232 psf. Despite this drop, average asking prices remain higher at $1,339 psf, highlighting a widening gap between developer expectations and buyer affordability.
Incentives such as cash-back offers at closing, rental guarantees, and flexible deposit terms have become increasingly common, as developers seek to stimulate sales.
Construction activity nosedives
Construction activity has also declined significantly. The number of new condos under construction fell to 69,042 units – a one-third decrease over two years. New starts in Q1 fell 79% compared to the same period in 2024, with only 497 units breaking ground – the lowest since 1996.
However, completions remain elevated, with 2025 expected to see 31,396 units delivered. This figure, while down 16% from the previous year, is still 67% above the 10-year average. Completions are projected to decline to 17,487 units in 2026 as the effects of the current slowdown take hold.
Unsold inventory continues to climb, rising 6% year-over-year to 23,918 units. This equates to roughly 78 months of supply – significantly higher than the balanced range of 10 to 12 months. Of these unsold units, 11,073 are in under-construction buildings, 10,934 are in pre-construction phases, and 1,911 are in completed projects.
Urbanation projects that 2,411 additional unsold units will reach completion by the end of this year.
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