Don’t expect the Greater Toronto Area (GTA) condo market to make a quick comeback. Meanwhile, non-stop conditions in the rest of the region still continue, as other major Canadian cities have succeeded to different extents. A very robust pre-construction buying trend developed during the pandemic, which carried through the early months of 2022 and led to unprecedented unit start records. Instead, the market is experiencing a shocking dissonance between available inventory and buyer demand. Recently released data indicates that condo sales in the GTA were approximately 10% lower compared to March 2024, signaling ongoing challenges for both buyers and sellers.
The average price of condo units in the GTA today is $767,300—a benchmark price. That’s a 0.9% drop from this time last year. The # of condo sales to active listings has fallen off a cliff. It now stands more than 60% below the long-term average, underscoring the severe headwinds that the market is facing right now. In March alone, almost 5,500 new condo units hit the market, bringing total active listings up to close to 4,700. With the arrival of new inventory, the power dynamics have definitely changed. Yet today, buyers are going more slowly to make decisions as competition continues to heat up.
Affordability and Buyer Expectations
The median price of a newly build unit in the GTA is relatively low at $420,000. In comparison the average price has skyrocketed to $682,000. Affordability alone isn’t the only thing buyers are looking for these days. They aren’t interested in any old space — they want specific features and amenities that cater to their changing needs.
“They’re like, ‘Well, if I’m going to pay this, I want a bigger place, or I want the balcony to be a wraparound, I want this type of view,’” – Cowans
Despite these enduring preferences, the market is not responding with nearly enough new construction to meet demand.
“The bad news is that there’s no new ones being built,” – Ryalls
This stagnation is especially troubling as a majority of developers are looking to put off starting new projects.
“So far this year, for sure, there hasn’t been the number of units being released to the marketplace that we probably would have expected,” – Ryalls
Experts warn that this new reality might spell permanent market changes that last far beyond any recession.
“So two years or three years from now, when we emerge from this, if that’s what the time frame is, there’s going to be no new product.” – Ryalls
As the GTA finds itself grappling with these issues, other Canadian metros are dealing with their own unique market forces. In Calgary, there’s a lot of Ontarians relocating out west. Their demand is driving Americans of all ages to look for more affordable housing options. This change couldn’t be in starker contrast to the situation in the GTA.
Montreal’s condo market is booming! Monthly numbers just released show condo sales in March were up more than 15% and sales in the first quarter were up almost 17%. In a parallel move, Vancouver’s condo market has been remarkably resilient, bolstered by extremely high ownership demand and stronger rates of construction than other areas.
Investor Confidence in the GTA Market
Kavcic points out that “the GTA would be probably the worst (condo) market in Canada at this point,” due in part to diminished investor interest and ongoing supply issues. Prospective buyers who had initially planned to resell houses for appreciation but instead are entering a much harsher climate.
“They wanted to flip that at completion for an equity gain, but they can’t do that anymore,” – Kavcic
Prospective buyers are weighing their options in a market with record high prices and few available homes. Most of them are taking a wait-and-see approach to see how the sex industry evolves. Yet the situation is a microcosm of what is happening to southern Ontario on a larger scale.
“It’s a similar story everywhere because everywhere in Canada, to some extent has been dealing with really strong population growth,” – Kavcic
Industry professionals are encouraged by a few positive developments elsewhere. They show that other factors continue to muddle the buying experience from coast to coast. Economic pressures and soaring interest rates complicate matters even further for would-be homebuyers.
“There’s still a lot of things going on where it’s tough for people to get into the market. The dollar is not as strong; the money that people are making hasn’t increased significantly,” – Cowans
Author’s Opinion
The GTA condo market’s ongoing struggle to find balance between supply and demand indicates a tough road ahead for potential buyers. While some Canadian cities are seeing positive momentum, the GTA remains heavily constrained by high prices, low inventory, and a lack of new construction. Until these market forces are addressed, it’s hard to envision a quick turnaround.
Featured image credit: Robert Ciavarro via Flickr
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