Market sees activity plunge
Toronto's condominium market has hit a record low point, with new unit sales plummeting to levels not seen in nearly three decades.
Sales of newly built condos in Canada's largest city fell by 57% compared to last year, with only 3,159 transactions recorded in the first half of 2024, according to a recent report by Urbanation.
The Greater Toronto Hamilton Area (GTHA) saw just 1,688 new condo sales in the second quarter of 2024, marking a 66% year-over-year decline and a 70% drop compared to the 20-year average. This represents the lowest second-quarter sales figures in the past 20 years, excluding the initial months of the COVID-19 pandemic in 2020, which saw 1,671 sales.
The report highlights that the first half of 2024 saw the slowest new condo sales since 1997, with the total number of units sold falling 72% below the 10-year average. This sharp decline in sales has led to a surge in unsold inventory, reaching a record high of 25,893 units – approximately 10,000 units (more than 60%) higher than both the 10-year and 20-year averages.
Average asking prices for unsold units have declined by 2.6% over the past year and by a total of 4.5% over the past two years, settling at an average of $1,361 per square foot.
“Overall, there has been minor movement in asking prices for unsold units despite the sharp drop in sales and rise in inventory,” the report read. “This demonstrates how sticky new condominium prices have become due to high development and financing costs, and record prices paid for land at the market peak.”
The slowdown in sales has also impacted construction starts, with only 727 new condo units beginning construction in Q2-2024 – a more than 20-year low. This has led to a 67% decrease in the latest four-quarter total of construction starts compared to the same period last year.
Read next: Canada's economy feels recession-like despite growth
Despite the sales slump, the industry has maintained focus on completing ongoing projects. The latest four-quarter total for completions reached 28,163 units in Q2-2024, only slightly below the record high set in the previous quarter.
However, completions are expected to decline for the remainder of the year, with a projected 38% drop in the second half of 2024 compared to the first half.
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
