Toronto condo market hits 35-year low as sales continue to plunge with ‘no new project launches’

Condo towers dot the Toronto skyline on Thursday Jan. 28, 2021. THE CANADIAN PRESS/Frank Gunn

There were zero new condo projects launched in the GTHA during the first quarter of the year for the first time in decades while sales declined to a 35-year low, according to a new report from real estate analysis firm Urbanation.

The report says a market downturn is now entering its fifth year and that inventory continues to “swell” up” with the record volume of condo completions in recent years increasingly putting “downward pressure” on prices.

Urbanation says that during the first couple months only 246 new condos were sold across the Greater Toronto Hamilton area (GTHA), which is down 54 per cent compared to 2025 and 94 per cent below the 10-year average.

“After the condo market sank to a new multi-decade low in the first quarter, it was encouraging to see a number of new initiatives announced that should help improve sales, reduce inventory and get more construction underway,” said Shaun Hildebrand, president of Urbanation.

“However, with market confidence still very fragile and demand fundamentals slowing down, the recovery process is likely to begin slowly.”

How bad are the numbers?

The report suggests the slowdown is linked to unsold units sitting on the market for months.

Urbanation says that “a record-high 4,295 new condos were completed and unsold as of Q1, more than doubling the level from a year ago.”

Another 8,629 unsold new condos are still expected to hit the market in the next few years, the firm said.

The report also notes that newly completed projects rose roughly 17 per cent compared to last year, adding to supply during a time when many buyers remain on the sidelines.

Developers are cutting prices in response to market conditions but officials suggest it is not enough to prop up the sagging market.

The average asking price for unsold new condos fell to $1,189 per square foot, down five per cent year-over-year and 13 per cent below peak levels from three years ago.

“Resale units in comparable buildings registered within the past three years averaged a selling price of $859,” the report read. “As a result, the gap between asking prices for developer-owned new condos and resale units remained at a record high 38 per cent.”

Officials emphasize that the government’s recently announced full HST rebate is expected to reduce prices on unsold new units by about $100,000 on average.