Not even record population growth was able to help new condo sales across Greater Toronto. A report from development research firm Urbanation shows new condo sales plummeted in 2023. It was the worst year for sales since the Great Recession, but that’s not all. The rush to build has left developers with the most unsold new condo inventory ever.
Greater Toronto New Condo Sales Had The Worst Year Since 2008
New condo sales had one of the worst years on record. Developers sold just 12,716 units in all of 2023, down 41% from the previous year and 58% from a year before that. The fast-growing greater Toronto region hasn’t seen this few new condo sales since 2008.
Source: Urbanation.
Toronto’s 905-Suburbs Have Seen Slightly More Resilient Demand
The city’s continued flight to the suburbs helped lessen the blow for the 905 region. City of Toronto represented 6,498 units out of last year’s total, a decline of 48% for the region. Meanwhile, the 905 region’s 6,218 remaining sales was a drop of 34% from a year before.
Toronto Condo Developers Have Never Had More Unsold Inventory
The lack of sales immediately following a building boom has resulted in swelling inventories. Developers were sitting on a record 22,477 units in Q4 2023, the most ever recorded in the region. It works out to 21.2 months of supply, which the firm estimates is twice as high as needed for a balanced market. That’s code for it’s a buyer’s market, when prices tend to fall unless a sudden rush moves in.
However, lower prices mean less incentive to build and that’s exactly what we’re seeing. Despite politicians going on cross country tours to helicoptere money to build more, it didn’t translate into any more units. The number of newly launched units fell 24% to 19,261 in the Greater Toronto region, about 13% below the 10-year average. Sad trombone noise.
A drop is typically seen after a low rate boom, since the additional sales are pulled-forward demand—purchases that were going to be made later, but accelerated due to cheap financing. However, it may surprise many to see when the population is rising at such a breakneck speed, along with policymakers throwing every incentive they can think of to motivate building.
You have to throw some helicopter money out to the buyers too Daniel, not just to developers, how do you expect them to pay for them, with buttons…
wrong.
this cant be.
clearly you haven’t been listening.
we have a *shortage* of housing.
that’s why we had to mow down the greenbelt asap.
My pal in Burlington just sold an unremarkable 1BR condo in less than a week, with 3 offers over the asking price. So things are definitely still moving in suburbia. Interesting numbers in this piece.
So when does the supply glut meet the demand?
NOBODY WILL WASTE THEIR MONEY ON CONDOS IN CANADA WHEN HOUSES COST 50K OR LESS IN THE USA.
SEE ZILLOW REDIN AND LANDSEARCH
SNOWBIRDING IS TAKING OFF AGAIN IN CANADA – LOOK AT THE RV DEALERSHIPS IN LANGLEY. LOOK AT THE RV STORGAGE LOTS AND THE GROWTH IN MULTI FAMILY. IF YOU ARE GONE HALF THE YEAR WHY WOULD YOU WASTE YOUR ONEY BUYING ANYTHING? SAY WITH FAMILY, FRIENDS ETC WHEN NORTH OF THE BORDER IN THE SPRING AND SUMMER
Nobody wants to be the group that officially drops pricing. Some developers will offer preferred deals to their serious investor/buyers but wholesale price slashing is desperation.
Higher for longer rates might force some of these smaller developers to the brink, but most are cash rich and their balance sheets are built for choppy water.
Total housing starts in the GTA (condo, single family and purpose-built rentals) are going to drop from 50,000 approx. in 2021 to approx. 15,000 in 2024! This will result in layoffs of as many as 50,000 highly paid construction workers over the next 18 months and usher in a depression in Ontario.
The population increase is mostly from India where condos are not one of their choices. Population growth will be continued urban sprawl to meet the new demographic.
The fundamentals are clear and well acknowledged, but has the issue relating to HOA and condo fees vs investment ever been discussed ?
It may not change the end result, but it can be a diagnostic!
If you see all new condos are barely livable.
Super small kitchen and 2 bedrooms crammed in less than 700 sq ft.
How do you raise a family. Glad this is happening and hope developers can build older layouts that are way more spacious.
Don’t 3 million Gazans need a place? That’s 3 million more votes for Justin…
The available stock is well beyond the affordability of newcomers in their host country as well as generational canadians. Cooling foreign investment means stock will sit on the market while canadian youth have no hope to own in their lifetimes.
Speculators have cooled on Canada. Sales now depend on affordability, & rapid population growth depresses wages. Could be a long wait for the next housing boom.
Absolute disaster, these are simply not affordable. Please don’t insult people with million dollar condos, worth less than $200k.
That’s s very good thing. Hopefully at some point, they will learn that ‘GREED’ doesn’t always work and sometimes you have to accept reality that you were a dam greedy Canadian, nothing else than taking advantage of other naive people…..
Im glad this is happening.
New condos are very small and not fit to raise a family.
Developers should consider that aspect too. That’s why old condos are still in demand due to their spacious layout with proper kitchens
Might it be because these condos are unlivable shoeboxes with condo fees higher than the building?