For the first time in three decades there were zero new condo projects launched in the Greater Toronto and Hamilton Area in the first quarter of the year, according to a new report from real estate market research firm Urbanation.
“I think for buyers, there’s a fear of catching a falling knife,” said Shaun Hildebrand, president of Urbanation.
There’s a “pretty significant confidence issue” in the market for both developers and buyers, which is one of the reasons why no new projects were started, he added.
He said resale condo prices — prices for condos already on the market — have dropped about 25 per cent from the market peak in 2022 to now, on a square foot basis, according to Urbanation’s numbers. It’s a “massive correction” that’s “the largest that the condo market has ever seen.”
The benchmark price for new condos across the Greater Toronto Area was $1.178 in February 2022, according to the Building Industry and Land Development Association (BILD). In February 2026 it was $1.022, about a 13 per cent dip.
Hildebrand said new condo prices haven’t come down as much because of high building costs, but this is also a reason why they aren’t selling.
“Buyers are not going to be rushing in to buy new condos that are priced 20 per cent higher than resale units. They need to be priced basically in line with resale.”
Over the first quarter of 2026, the fifth year of the condo market downturn, just 246 new condos were sold in the Greater Toronto and Hamilton Area. That’s down 52 per cent year over year, and 94 per cent below the 10-year average for first quarters (4,046).
Unsold inventory of new condos was also at a record high at 4,295, but sales did increase 17 per cent annually to a four-year high of 148 units.
Urbanation estimates there is 92 months of inventory — the time it would take to sell them at current demand — for completed new condos (this doesn’t count units that were pre-sold but failed to close). That’s on top of 8,629 new condos under construction that should come on to the market in the next few years.
“I think it’s safe to say that we’re at the bottom for sales. I think we actually can’t really go lower,” Hildebrand said, adding that the recently announced HST rebate should help encourage sales.
Faced with a glut of supply, dropping prices and a lack of demand from investors, many developers are pulling the plug on projects.
Almost a thousand condo units (963) were cancelled across the Greater Toronto and Hamilton Area in the first quarter of this year, and they are all being converted to rentals, according to the report.
Since the beginning of 2024, over 11,000 condo units have been cancelled, with just over 4,000 converted to rental.
Hildebrand added that now that there are fewer condo completions, inventory of condos already on the market is “starting to turn a corner.” He’s seeing the number of active and new listings start to drop, which should help provide stability and create a floor for prices at some point this year.
Devin Glowinski, a realtor with Property.ca, said he has seen a return to basics, which has been refreshing.
He has been working with some first-time buyers who care less about timing the market and more about things like nice layouts, real bedrooms and space to grow into.
“These are homes not commodities,” he said. Glowinski also noted that these kinds of units are still very competitive with multiple offers. It’s the smaller ones people don’t want.
“Everybody thinks it’s a buyer’s market where every condo can be purchased for a steal but that’s not the case at all,” he said.
Victor Tran, a Rates.ca mortgage and real estate expert, said he thinks there’s still room for property values to drop in the resale condo market.
“Especially since we’re heading into the busiest year for mortgage renewals, and there’s a lot of investors that are holding on to condos that are going to be feeling a pinch,” he said.
Many of these people signed mortgages during historically low rates during the pandemic, and will be facing a big “payment shock.”
While the investor pool has “dried up” over the last few years, Tran, who is also a Toronto mortgage broker, said has heard of some looking to get back in the market, especially as prices drop.
But he thinks first-time buyers are more cautious, especially with the Iran war pushing up energy prices, bond yields, and fixed-interest rates.
“It’s still a scary time to dump a lot of money into the condo market,” Tran said.
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