There were 567 new condo sales in the Greater Toronto Hamilton Area (GTHA) in Q3-2024, the lowest quarterly total since the first quarter of 1995.
According to Urbanation’s Q3-2024 condominium market survey, new condo sales fell 81 per cent year-over-year and were 87 per cent below the latest 10-year average for Q3 periods.
The condo market in the GTHA is on track for its slowest year since 1996. Year-to-date new condo sales totalled 3,641 units, down 63 per cent from the same period last year and 84 per cent below the same period in 2021.
Urbanation president Shaun Hildebrand said the new condo market is facing its toughest challenge in decades. “Investors are inactive and end-user buyers currently have plenty of lower-priced options to choose from in the resale market,” he noted. “It may take a while, but conditions will gradually improve as developers hold back supply, construction inventory continues to drop, and demand rises with declining interest rates.”
Unsold new condo units in development decreased 4.4 per cent quarter-over-quarter from the record high of 25,018 units in Q2-2024 to 23,918 units in Q3-2024. It was the largest quarterly decline in unsold inventory in two-and-a-half years, mainly resulting from a lack of new project launches, with only one project totaling 177 units brought to market in Q3-2024.
Compared to a year ago unsold new condo inventory rose 16 per cent, 56 per cent above the latest 10-year average. Unsold inventory was comprised of 11,629 units in pre-construction projects, 11,356 units in under construction projects, and 933 units in completed projects. A 76 per cent share of unsold inventory was in projects that required purchaser deposits of at least 20 per cent.
Urbanation forecasts the new mortgage rules will likely have a limited direct impact on new condos, since most buyers were already able to access 30-year amortizations. A 13 per cent share of unsold units required 15 per cent in deposits, and an 11 per cent share required 10 per cent deposits or less.
Unsold new condo prices averaged $1,349 per square foot in Q3-2024, a 2.4 per cent year-over-year decline. Since reaching a record of $1,429 per square foor two years ago in Q3-2022, average new condo prices have decreased by 5.6 per cent.
Among active new condo projects that previously launched for presales, three projects amounting to 1,111 units were converted to purpose-built rental and an additional eight projects totaling 2,231 units were either put on hold, cancelled or placed into receivership during the third quarter.
Over the past two years, 33 new condominium projects that were actively selling were either converted to rental, put on hold, cancelled or went into receivership.
A total of 2,163 new condominiums started construction in the third quarter, a 13 per cent year-over-year decline and the slowest Q3 period for starts in over a decade. The year-to-date total of 7,200 new condo starts fell 53 per cent from the same period in 2023 and were down 73 per cent from the same period in 2022. The 88,967 total new condominiums under construction across the GTHA in Q3-2024 represented a more than three-year low.
Condo completions are expected reach a total of 24,386 units in 2024, slightly edging out last year’s record high and are projected to reach another record high of 29,409 units in 2025 before declining in the years that follow.
