The new condo market has “gone from bad to terrible” as a total of 21 condo projects have been cancelled across the Greater Toronto and Hamilton Area (GTHA) since the start of 2024, with completed condo inventory swelling to a record-high.
The GTHA new condo apartment sales in the second quarter of this year continued to break 30-year lows by declining 10 per cent from the first quarter and dropping 69 per cent year over year, according to report from real estate research firm Urbanation, released Tuesday.
While the second quarter typically represents the strongest period of the year for new condo sales, the report said, activity is 91 per cent below the 10-year average.
“It’s a really bad time for the industry, the market has gone from bad to terrible. The sentiment is so bad right now things won’t improve any time soon,” Shaun Hildebrand, president of Urbanation.
The market would need to see a 10 per cent drop in prices and a few more interest cuts “to restart the engine and have the numbers make more sense for buyers.”
“The market has entered a phase of the downturn that is really starting to wreak havoc,” he said. “Project cancellations are mounting, construction starts are collapsing, jobs are being lost, buyers are losing a lot of money, and developers are facing difficulties with closings.”
He added there will be a lot more project cancellations pouring into the market later this year, as many of the preconstruction condo projects are sitting at low presales.
Developers are continuing to pause new condo launches, with only three projects — totalling 891 units — launched for presales in the second quarter.
As well, a total of four projects (719 units) were cancelled, bringing the total since the start of 2024 to 20 projects and 4,360 units cancelled.
Nine cancelled projects since 2024 are being converted to rental, including three of the cancelled projects in the second quarter of this year.
Elevated construction and materials costs, labour shortages and high interest rates have devastated the preconstruction homebuilding market, with dozens of builders owing millions to their creditors and hundreds of buyers unable to close on their units.
“While a reduction to deliveries next year should help to alleviate some pressure, the near-term will remain very challenging,” Hildebrand said.
The Star has produced an exclusive map of Toronto condo projects that have been cancelled, put into receivership, or are being converted to rental that will be continually updated.
The GTHA had a record-high of 2,478 new condos that were completed and available for purchase in the second quarter — a 102 per cent increase from a year ago and five times higher than two years ago.
Meanwhile, there are 60 months of supply for standing inventory on the market.
A total of 17,117 condos were scheduled for completion during the second half of the year, bringing the total for 2025 to a record-high 31,422 units — completions are projected to decline to a historically normal level of 18,037 units in 2026.
Completions are projected to continue trending lower in the post-2026 period due to the drop-off in construction, causing a significant supply shortage.
