New condominium sales plummet to 27-year low

by Pedram Madadkar

A recent study by Toronto-based Urbanation Inc. revealed a significant slowdown in the Greater Toronto Hamilton Area (GTHA) condo market, marking a historic low in sales. According to the Q2-2024 Condominium Market Survey, condo sales plummeted to a 27-year low in the first half of 2024.

In Q2-2024, the GTHA reported just 1,688 condo sales, a staggering 66% drop year-over-year and 70% below the 20-year average. The first half of 2024 saw a total of only 3,159 units sold, reflecting a 57% decline from the previous year and 72% below the 10-year average. This period marks the slowest for new condo sales since 1997.

The drop in sales has pushed unsold inventory to a record high of 25,893 units, significantly higher than both the 10-year and 20-year averages by approximately 10,000 units. This inventory includes 15,157 units in pre-construction, 9,788 units under construction, and 948 units in recently completed buildings.

Despite the market conditions, the average asking price for unsold units has seen a minimal decline, decreasing by only 2.6% over the past year and 4.5% over the past two years.

Shaun Hildebrand, President of Urbanation, commented, "With condo prices still near record highs and a modest 25 basis point decline in interest rates in June from their 22-year high, buyers remained cautious, anticipating further rate cuts amidst a burgeoning supply of units for sale. The continued weakening in condo market conditions during the second quarter of 2024 is likely to cause more projects slated for launch this year to remain on hold, while others struggling to meet sales thresholds for construction financing may ultimately be pulled from the market."

For a detailed analysis and insights, check out the full report by Urbanation Inc. Let's keep an eye on these trends as we navigate through these challenging times in the real estate market.