Last year marked the slowest year for new condominium sales in the Greater Toronto Hamilton Area (GTHA) since 1996.
In 2024, the GTHA new condo market reported 4,590 sales in 2024, declining for the third straight year with a 64 per cent drop from 2023 and a 78 per cent decline compared to the 10-year average, according to research firm Urbanation’s 2024 condominium market results survey.
“The new condo market just experienced its toughest year in three decades,” said Shaun Hildebrand, president of Urbanation. “Expectations for the market remain low this year as investors, the primary driver of presale activity, continue to deal with negative cash flow, difficulties arranging financing and declining prices and rents.”
High interest rates and the cost to build are preventing preconstruction buyers, of which many are investors who have fled the new build space, experts say. Because rents have dropped and mortgages have increased, the negative cash flow is a deterrent for investors.
There is also significant inventory in the resale condo market (existing supply) which has an impact on the new build market. Only when the resale market has limited supply, buyers then look to preconstruction.
New condo sales increased by 12 per cent in the fourth quarter compared to the third quarter but was still down 71 per cent annually — representing the lowest fourth quarter sales total since 1993.
Six projects launched for presales during the fourth quarter but only 10 per cent of the units sold.
Unsold new condo units in development — including pre-construction, under construction and recently completed projects — reached a record high 24,277 units at the end of 2024, which is 50 per cent above the latest 10-year average.
“At the 2024 level of sales, it would take 64 months to clear current unsold inventory, a record high that is nearly six times higher than a balanced level of inventory at 10-12 months of supply,” the report said.
However, due to intense presale activity during the pandemic completion in 2024 were brought to a record high of 29,800 units, and completions are set for another record high in 2025 with 30,793 units scheduled to finish construction.
In terms of cancelled projects, Hildebrand said they counted 14 totalling 2,806 units that officially cancelled in 2024. Of this, six (1,434 units) were converted to rental.
“There are a whole bunch more that are in receivership, have paused sales and are very likely to cancel but haven’t actually given purchasers their deposits back. It’s difficult to put a number to it, but there is likely more cancellations coming in 2025,” he added.
“The drop in presale activity will continue to cripple construction starts in 2025, causing a massive decrease in new supply beginning in 2026 to 2027.”
