Following one of the weakest years on record, Toronto developers just had the worst start to a year ever.BILD GTA and Altus Group data show Greater Toronto new home sales slipped lower in January, making it the weakest on record. The pullback in inventory was met with an even larger drop in sales, leaving the market with an unusually weak demand balance—about 76 months of inventory, if not a single new project is announced.
Toronto New Home Prices: Single-Family Prices Fall, Condos Rise
Source: Altus Group; BILD GTA.
Greater Toronto’s new home prices were surprisingly mixed. The price of a typical new single-family home fell 0.9% (-$12.4k) to $1.4 million in January, 10.0% (-$155.3k) lower than last year and -26.0% (-$491.4k) from its peak. Prices for the segment are now roughly where they were in early 2021, erasing more than half the gains from 2020 to the 2022 peak.
Condo apartments fared better, rising 0.6% (+$6.3k) to $1.03 million, up 1.2% (+$12.2k) from a year prior. Prices remain roughly 17.6% (-$219.7k) below peak, so the mild gain isn’t quite a turnaround. It’s worth noting a methodology quirk here: The Altus Group’s new home benchmark uses developer asking prices and rarely reflects the concessions used to market new homes.
Toronto New Home Sales Down 90% From Peak
Greater Toronto new home sales, January.
Source: BILD GTA; Altus Group: Better Dwelling.
Greater Toronto’s new home sales kicked off with the worst start to a new year ever. Altus reported just 269 new home sales in January, 36% lower than last year and 80% below the 10-year average. For context, this is 90.7% lower than the region’s frenzy peak in 2022, when sales were 10x higher. BILD reported this was the worst January on record, with weather certainly not helping the downturn.
A breakdown by segment pours cold water on the narrative that this is just a condo story. Just 184 single-family homes sold last month, down 26% from last year and 68% below the 10-year average from January. The group didn’t specify if this was a record low, but we couldn’t find a weaker January in at least 20 years.
Despite higher prices, apparently, the damage isn’t over for condo apartments. Developers sold just 85 new condos in January, down 50% from last year and 89% below the 10-year average. We couldn’t find a weaker January in 25 years, and this is most likely the driver of that record low reported. Weak demand may have also contributed to the price skew, as comparisons become more difficult to properly gauge when there’s only a handful of buyers.
Toronto New Home Inventory Remains Robust, 76 Months of Supply
Greater Toronto new home inventory, January.
Source: BILD GTA; Altus Group: Better Dwelling.
Weak demand in the construction crane capital of the world has led to the rapid buildup of inventory. Total inventory fell to 20,557 new homes for sale in January, down 10.0% from last year—though still the second-most for the month in over 15 years. Despite lower inventory, falling sales make this level even more potent. At this pace, there are 76 months of inventory, indicating a serious oversupply issue.
While the majority are still condo apartments, single-family housing is rising fast. There were 5,826 single-family units for sale at the end of January, up 27% year over year and roughly 10x the historic lows seen during the 2022 frenzy. That’s likely to add downward pressure for all market segments.
Weak single-family demand and rising inventory are providing downward pressure on prices. This has been closing the gap between the two, making it the smallest since early 2022. Condo prices may be rising (albeit not much), but as this gap closes, the value proposition of a condo—less space, maintenance fees, construction risks—becomes harder to justify.
Watching this from my fully paid home in the 905, and not at all surprised. The frenzy was unsustainable. Prices got detached from reality.
A correction is inevitable, but we’re not really seeing much of a correction here. We’re pretending the prices are still inflated and this is just a matter of interest rates or some switch that will flick and change everything, but first-time buyers can’t afford this. Without first time buyers, you don’t have upgrades.
Not just that. The low rate scheme is what pulls the lifeblood out of a city, as it’s designed to divert funds from productive resources to non-productive debt servicing for much longer.
Builder here. The data looks even better than reality right now, but the “asking price” is the key here.
Tons of incentives: free upgrades, rate buy downs, even “cash backs.” The latter is basically a trade secret to avoid impacting real prices that would hit appraisals, but a way to help buyers back to reality. It never hurts to ask if you’re in the market and things look slow!
In the words of the great Marc Cohodes, there’s a word to describe that—starts with an f, and ends with people in jail.
Living downtown in a condo. The article says condo prices are up slightly? That doesn’t match what I’m seeing. Friends trying to sell aren’t even seeing low ball offers, just nothing at all.
Doesn’t match TRREB data either – I find it hard to believe new condos are selling for $1.03 mil on average.
“Condo prices rising”!!!!!!
Why?
I thought it was a free market?
How can prices be rising right now?
I guess it’s not a free market then…
The longer we prevent the inevitable the worse it’s gonna be.
The longer you delay the inevitable the worse it will be.
I hope you don’t go bankrupt but things need to adjust.
Never catch a falling knife.
PRICE DROPS EVERYWHERE
NOBODY BUYING
CANADA GONE COLD TURKEY
I said “I ain’t buying no million dollar home” and i mean it. Bring them back to under 750k. Until then i won’t bother.
USA 2008 , 10 million foreclosures and a 700 billion dollar fed bailout, like this has never happened before ? , and can someone tell McWFK to stop using all caps . nobody listens to someone that yells all the time, and I hope he’s financed to the ears , because it’s coming.