Toronto condo market in turmoil as sales plummet to 27-year low

A new study conducted by a Toronto-based real estate research group found that the Greater Toronto Hamilton Area (GTHA) saw condo sales drop to a 27-year low in the first half of 2024. 

Urbanation Inc. released its Q2-2024 Condominium Market Survey results on Thursday and found that the region's last quarter sales represented the lowest Q2 result of the past 20 years outside of the initial months of COVID-19. 

The GTHA new condominium market reported just 1,688 sales in Q2-2024, down 66 per cent year-over-year and falling 70 per cent below the 20-year average. 

New condo sales in the first half of 2024 totalled just 3,159 units, a 57 per cent decline from a year ago and 72 per cent below the 10-year average. The real estate firm says the first half of 2024 was the slowest for new condo sales in the region since 1997. 

The drop in sales during the second quarter also pushed the total unsold inventory to a record high of 25,893 units, a level that was roughly 10,000 units higher than both the 10-year and 20-year averages. 

The report notes that most unsold inventory in the region was in pre-construction projects with a total of 15,157 units, compared to 9,788 unsold units under construction, and 948 unsold units in recently completed buildings. 

Urbanation also added that the average asking price for unsold units declined just 2.6 per cent over the past year and by only 4.5 per cent over the past two years. 

"With condo prices still near record highs and only a modest 25 basis point decline in interest rates in June from their 22-year high, buyers remained cautious in anticipation of further rate cuts and amidst a burgeoning supply of units for sale," said Urbanation President Shaun Hildebrand. 

"The continued weakening in condo market conditions during the second quarter of 2024 is likely to cause more projects that were slated to launch this year to remain on hold, while others that are struggling to meet sales thresholds for construction financing may ultimately be pulled from the market."