Not even record population growth was able to help new condo sales across Greater Toronto. A report from development research firm Urbanation shows new condo sales plummeted in 2023. It was the worst year for sales since the Great Recession, but that’s not all. The rush to build has left developers with the most unsold new condo inventory ever.
Greater Toronto New Condo Sales Had The Worst Year Since 2008
New condo sales had one of the worst years on record. Developers sold just 12,716 units in all of 2023, down 41% from the previous year and 58% from a year before that. The fast-growing greater Toronto region hasn’t seen this few new condo sales since 2008.
Source: Urbanation.
Toronto’s 905-Suburbs Have Seen Slightly More Resilient Demand
The city’s continued flight to the suburbs helped lessen the blow for the 905 region. City of Toronto represented 6,498 units out of last year’s total, a decline of 48% for the region. Meanwhile, the 905 region’s 6,218 remaining sales was a drop of 34% from a year before.
Toronto Condo Developers Have Never Had More Unsold Inventory
The lack of sales immediately following a building boom has resulted in swelling inventories. Developers were sitting on a record 22,477 units in Q4 2023, the most ever recorded in the region. It works out to 21.2 months of supply, which the firm estimates is twice as high as needed for a balanced market. That’s code for it’s a buyer’s market, when prices tend to fall unless a sudden rush moves in.
However, lower prices mean less incentive to build and that’s exactly what we’re seeing. Despite politicians going on cross country tours to helicoptere money to build more, it didn’t translate into any more units. The number of newly launched units fell 24% to 19,261 in the Greater Toronto region, about 13% below the 10-year average. Sad trombone noise.
A drop is typically seen after a low rate boom, since the additional sales are pulled-forward demand—purchases that were going to be made later, but accelerated due to cheap financing. However, it may surprise many to see when the population is rising at such a breakneck speed, along with policymakers throwing every incentive they can think of to motivate building.
