Greater Toronto New Condo Sales Plummet to 2008 Lows

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The Toronto condo market saw dismal new project sales in 2023, dropping to depths not reached since the Great Recession. This is despite continued rapid population growth that would normally lift demand.?

A key factor is declining affordability. As mortgage rates have increased, fewer potential homebuyers can manage the monthly costs of owning. This is forcing more people to put off purchases and continue renting instead.

Overall, developers sold just 12,716 new condo units last year, according to research firm Urbanation. This represents a 41% annual decline and a staggering 58% drop from 2021 levels. You would have to go back to 2008 to find fewer new condo sales in the thriving Greater Toronto Area (GTA).

The flight of residents to suburban regions provided a slight buffer to falling demand. New sales in the City of Toronto itself plunged 48% from the year before. The 905 suburban markets fared relatively better, with a 34% slide. However, the numbers point to widespread softness.

Adding to the woes, the construction boom before cooling demand has left developers holding the bag. Urbanation reports a record 22,477 unsold new condo units in Q4 2023 - equal to a massive 21 months' worth of inventory. Essentially a buyer’s market.

The pulls back have taken the wind out of the sails of new projects. Despite governments actively encouraging more construction, new project launches tumbled 24% last year. Housing targets continue to take hits even as the population rises rapidly.?

In summary, the once red-hot Toronto condo scene has iced over. Sales have retreated to recession-era lows even as people continue flocking to the region. While politicians push for further expansion, developers have slammed the brakes on new launches for now.

Declining affordability has forced more potential homebuyers into renting, causing demand for multifamily rental apartments to rise substantially. Investing in multifamily rental properties could be a strategic move in this uncertain market. To learn more, contact me at 604.613.1693 or email me at [email protected].

The source article, linked here, provides full details: Toronto Real Estate Developers Have Never Had More Unsold Condos

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