New trends show ground-related homes gaining popularity
Townhouses in the Greater Toronto and Hamilton Area (GTHA) experienced their strongest quarter in two years, as sales outpaced struggling condominium and apartment markets, according to Zonda Urban’s 2024 report.
Townhouses accounted for 43% of total annual housing volume in 2024, the largest share in over a decade. A total of 3,255 townhouses were sold during the year, maintaining levels similar to 2023. The fourth quarter alone saw townhouse sales climb to 1,043 units, marking a two-year high, the report noted. Townhouses represented 60% of sales in the latter half of the year.
In stark contrast, condominium and apartment sales fell significantly for the third consecutive year, with 2024 recording a 49% year-over-year drop. A total of 7,649 units were sold, a sharp decline from previous years.
Source: Zonda Urban
“The contrast in demand between the two market sectors, apartments and townhouses, could not have been more stark,” said Pauline Lierman, Zonda Urban’s vice president of market research. “Developers with townhouse product showed optimism, with several projects selling out shortly after launch. Meanwhile, those on the condo apartment side still have high unsold inventory.”
Market shift
The average price of a new condominium apartment in the GTHA was $1,141 per sq ft as of Q4 2024, with an average sale price of $783,535 for a 689-sq-ft unit. Prices remained steady compared to Q4 2023.
In contrast, the average townhouse price dropped 3% year-over-year to $1,135,191 for a 1,674-sq-ft unit, as smaller product offerings entered the market.
Condominium developers faced additional challenges with new projects needing competitive pricing to compete with the resale market, yielding only slight sales growth during the summer months.
The divergence between the townhouse and apartment markets extended to new project launches.
- Condominium apartments: Just 21 new projects (6,587 units) launched in 2024, the lowest number in over 15 years. Only 19% of units sold at launch, a steep drop from absorption rates of 38% in 2023 and 63% in 2022.
- Townhouses: A total of 54 new townhouse projects (2,436 units) launched, with 58% of units sold at opening. This marks a modest increase from a 55% absorption rate in 2023.
Outlook for 2025
Zonda Urban predicts the high volume of apartment completions will hinder any significant recovery in the condominium market during the first half of 2025. Additionally, 3,461 apartment units were pulled from the market in 2024 across eight buildings, the highest number of cancellations since 2018.
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