toronto condos

Dozens of GTA condos put on hold amid tanking market

A substantial number of condo complexes that were supposed to open their doors to residents in and around Toronto recently have now been halted indefinitely due to the faltering market.

While interest in single-family homes, mansions and resale condos appears to be picking back up after high interest rates and cost of living increases undermined sales last year, there hasn't been the same return of buyers for new condos — a housing type known for being popular primarily among investors.

As indicated by the fact that the number of sales of new condo units in the GTHA dropped to a 15-year low in the first few months of this year, developers are running out of funds and confidence to complete projects, even those already in the works.

According to a new report from real estate experts at Urbanation this week, 60 condo communities that were due to open in the last two years or so have now been put on hold indefinitely as dwindling sales have "hit construction activity hard."

These buildings make up 21,505 units that were expected to come to market, with anyone who bought a unit preconstruction now left in the lurch and facing rising home prices.

Looking at the first quarter of 2024 specifically, Urbanation says that only 50 per cent of units in pre-construction were pre-sold, which is well below the construction financing requirements of 70 per cent.

It is also down from the same time last year, when 61 per cent had been pre-sold, and the year before that, a heydey when this figure was 85 per cent.

As a result, construction starts have fallen off a cliff, with the firm noting that the 2,361 new condominiums that began construction in the GTHA marked a 52 per cent drop from how many broke ground during the same period last year.

The number of condos at any stage of unfinished progress in the region is now 91,590 units, which is actually not the worst thanks to a high number of completions so far this year, amounting t0 12,132 units.

But, it is worth noting that most new condos are now in the 905 rather than Toronto proper. Of the 17,076 units across 56 projects that Urbanation says have released marketing materials ahead of a planned launch in the next few quarters, 70 per cent were in the 905 area code.

This latest analysis anticipates that the lower mortgage rates expected to come later this year will help things, but that activity in the new condo market "will likely remain subdued as the industry works it way through current inventory and digests the numerous government policies on housing recently released."

Lead photo by

Roy Harris/Shutterstock

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