The Toronto condo market is facing a significant shift, hitting the lowest quarterly sales figures since 1995. The recent Q3 report from Urbanation highlights a deepening trend, with new condo sales dropping 81% year over year. Let’s break down what this means for buyers and sellers.
The Sales Drop: What’s Behind the Numbers?
Toronto’s condo sector has seen a drastic decline, with sales in the Greater Toronto and Hamilton Area (GTHA) decreasing by 63% from last year and an even steeper 84% below 2021 levels. New construction sales are particularly affected, as many investors have turned to more affordable resale options. This has created a significant price gap: new construction condos are currently priced between $1,600 and $2,000 per square foot, while resale options nearby can be found for $850 to $1,000 per square foot, making resale nearly 60% cheaper.
Resale vs. Pre-Construction Market
The price disparity between pre-construction and resale markets is notable, especially for buyers. For those interested in downtown Toronto, new projects are being sold at a premium, while resale units offer competitive pricing. This trend has made resale an attractive option for buyers, and developers are facing challenges as new units struggle to sell.
Financial Impact on New Developments
With pre-construction sales slowing, many projects are affected financially. Lenders often require a certain percentage of pre-sales before financing construction, and without these sales, projects may be delayed or even canceled. In Q3 alone, over 1,100 units were converted to rentals, while eight projects were put on hold or canceled. In total, 33 projects with nearly 6,800 units have seen similar fates in the past two years. These setbacks could reduce future inventory, which may eventually drive up demand and prices.
Opportunities for Buyers in Today’s Market
For potential buyers, this shift presents opportunities. Toronto’s core currently has record inventory levels, especially in popular areas like Bloor to the water and the downtown core. Buyers now have more choice and a better chance of finding properties that fit their needs within budget. For those flexible with closing dates and ready to act, there are competitive options in the resale market.
Strategies for Sellers in a Competitive Market
For sellers, particularly those with resale units, strategic marketing and competitive pricing are key. With more inventory on the market, sellers need to present their condos in the best light possible. A well-presented property, priced correctly, has the best chance of standing out and attracting serious buyers. Testing the market with high prices from previous years may not yield results, but sellers with realistic expectations are finding opportunities to successfully upsize from condos to houses—a move that may have been out of reach just a few years ago.
Looking Ahead
As we move toward the end of the fall market, the Toronto condo sector remains in a state of adjustment. Buyers have more choices, and sellers are navigating an increasingly competitive landscape. The coming months will be crucial in understanding how these changes shape the market moving forward.
The Sales Drop: What’s Behind the Numbers?
Toronto’s condo sector has seen a drastic decline, with sales in the Greater Toronto and Hamilton Area (GTHA) decreasing by 63% from last year and an even steeper 84% below 2021 levels. New construction sales are particularly affected, as many investors have turned to more affordable resale options. This has created a significant price gap: new construction condos are currently priced between $1,600 and $2,000 per square foot, while resale options nearby can be found for $850 to $1,000 per square foot, making resale nearly 60% cheaper.
Resale vs. Pre-Construction Market
The price disparity between pre-construction and resale markets is notable, especially for buyers. For those interested in downtown Toronto, new projects are being sold at a premium, while resale units offer competitive pricing. This trend has made resale an attractive option for buyers, and developers are facing challenges as new units struggle to sell.
Financial Impact on New Developments
With pre-construction sales slowing, many projects are affected financially. Lenders often require a certain percentage of pre-sales before financing construction, and without these sales, projects may be delayed or even canceled. In Q3 alone, over 1,100 units were converted to rentals, while eight projects were put on hold or canceled. In total, 33 projects with nearly 6,800 units have seen similar fates in the past two years. These setbacks could reduce future inventory, which may eventually drive up demand and prices.
Opportunities for Buyers in Today’s Market
For potential buyers, this shift presents opportunities. Toronto’s core currently has record inventory levels, especially in popular areas like Bloor to the water and the downtown core. Buyers now have more choice and a better chance of finding properties that fit their needs within budget. For those flexible with closing dates and ready to act, there are competitive options in the resale market.
Strategies for Sellers in a Competitive Market
For sellers, particularly those with resale units, strategic marketing and competitive pricing are key. With more inventory on the market, sellers need to present their condos in the best light possible. A well-presented property, priced correctly, has the best chance of standing out and attracting serious buyers. Testing the market with high prices from previous years may not yield results, but sellers with realistic expectations are finding opportunities to successfully upsize from condos to houses—a move that may have been out of reach just a few years ago.
Looking Ahead
As we move toward the end of the fall market, the Toronto condo sector remains in a state of adjustment. Buyers have more choices, and sellers are navigating an increasingly competitive landscape. The coming months will be crucial in understanding how these changes shape the market moving forward.
