Toronto’s homebuilders’ association is warning of a looming housing “drought” as sales of new homes remained stagnant last month — especially condos, with only 118 units selling regionwide.
The monthly data, compiled by Altus Group on behalf of the Building Industry and Land Development Association (BILD), shows just 300 new homes of any kind selling across the GTA in August. In a typical August over the past decade, 1,595 home would change hands, it said. For condos, including stacked townhomes, last month’s sales were 90 per cent below the 10-year average.
“We’re rapidly getting to the point where there’s going to be no cranes in the sky in the next couple of years,” said BILD spokesperson Justin Sherwood.
While the market has been struggling for the past few years due to higher interest rates and building costs, last month’s sales numbers are poor even in contrast with August 2024 — described at the time as a “weak” market.
Year-over-year, August’s sales dropped by 42 per cent, the data shows. Condo sales dropped the furthest, down 59 per cent compared with last August, while sales of new single-family homes were 21 per cent lower.
The glut of homes sitting on the market did drop slightly compared to July, now at 22,245 units, the report says — largely made up of condos, with 16,447 condo apartments and 5,798 single-family homes without buyers.
The benchmark price for new condos meanwhile sat at nearly $1.029 million. Assuming a household could make a 20 per cent down payment — about $206,000 — and got a five per cent mortgage rate, a buyer would have to pay around $4,800 per month in costs for that condo. Even without factoring in other housing bills such as condo fees, national affordability standards suggest that household would need to earn around $192,000 to comfortably cover it.
For a single-family home, the income bar rises higher, with a benchmark price of $1.462 million.
BILD has been among voices warning, for some time, that the standstill in the market risks long-term impacts — including fewer jobs for skilled trade workers, and stalled or shelved developments.
“With pre-construction inventory dropping dramatically, the signs are clear that the new residential sector in the GTA is basically stopping,” says their report, which reiterated calls for government intervention such as a suspension of GST on all new homes under $1 million and a reduction in fees charged by cities to developers.
Canada’s federal housing minister, Gregor Robertson, recently characterized the country’s condo market specifically as being in “free fall.”
“That type of housing was overbuilt in recent years, and it’s not selling in today’s market,” Robertson told the Star’s May Warren in early September.
While Sherwood agrees that housing industry players have struggled to ensure an adequate supply of “suitable, family-oriented housing” in recent memory, he said that the housing supply of past years focused on smaller condo units in particular because it was what people were buying — whether that was ordinary buyers who couldn’t afford more or investors who’ve since retreated.
He worries, now, that buyers looking for new homes in the years ahead will face a more limited supply — risking more competition and cost run-ups.
“What we actually need is a continual, healthy supply coming to market to meet the population’s needs,” Sherwood said.
