Toronto condo sales plunge to historic lows not seen since the mid-1990s

It’s hard to overstate how far Toronto’s new condo market has fallen from the era of rushed multi-offer bidding wars for overpriced, arguably unlivable units by those eager to get their hands on any slice of the city’s real estate.

Investors, who typically hold the majority of the city’s newly-built condo stock, took great pause this last year-plus as most suddenly found themselves hemorrhaging money rather than making it in light of unwaveringly sky-high prices, increased lending rates, surging cost of living generally and lower rents.

First-time buyers, too, could hardly justify (or afford) the costs associated with entry-level home ownership in and around Toronto, as indicated by a slump that persisted through the end of the year, according to the latest data.

As outlined in a report released by Urbanation on Thursday, new condo sales across the GTHA in 2024 plummeted to numbers not seen since the mid-’90s.

Toronto condo prices are dropping fast as sales continue to crash📉https://t.co/bOzcsuoLVq

— blogTO (@blogTO) October 30, 2024

The 4,590 individual units sold in Toronto, Hamilton and surrounding cities and towns over the course of the year marks an astounding 64 per cent decline from 2023’s figures, and a 78 per cent drop below the 10-year average for new condo sales in the area.

In the last few months of the year, only 10 per cent of presale units that came to market actually sold, despite them being 15 per cent cheaper, on average, than in 2023 and priced lower than in the last 2.5 years.

Reflecting on the year, Urbanation wrote that the sector had “experienced its toughest year in three decades,” and that “expectations for the market remain low this year.”

“Investors, the primary driver of presale activity, continue to deal with negative cash flow, difficulties arranging financing and declining prices and rents,” the firm’s CEO wrote in Thursday’s release. 

He also warns that “the drop in presale activity will continue to cripple construction starts in 2025, causing a massive decrease in new supply beginning in 2026-2027.”

Toronto has entirely too many condos on the market and nobody seems to be buying themhttps://t.co/TikNcV39Z2

— blogTO (@blogTO) September 12, 2024

Developers, facing heightened costs of construction themselves alongside this sharp decrease in demand, have had to stall or completely nix a number of upcoming projects that were set to introduce tens of thousands of new homes to the region in recent months.

Some even went into receivership due to a lack of funds from early sales.

Other stats published in Urbanation’s retrospective include the fact that total condominium starts in the GTHA in 2024 hit the lowest level since 2002, and that sales in Q4 of 2024 were the lowest since 1993, while the year as a whole was the slowest for the housing type since 1996.