Condo Market Data Reveals Long-term Risks

Toronto’s weakened condominium market is expected to endure as completions of new developments remain near record levels and overall sector demand is still subdued.

This is according to a new report by Canada Mortgage and Housing Corporation.

A record high 25,575 condo apartments were completed in 2024. Higher interest rates and trade uncertainty have reduced demand, coinciding with a huge swath of inventory. By the end of the first quarter of 2025, sales had fallen 75% in three years.

More than half of pre-construction units went unsold in Q1. This level presents a significant challenge for developers seeking funding for their projects. Lenders typically require a pre-sale threshold of 70% prior to releasing funds.

Months of inventory for pre-construction condos in the first quarter of 2025 were more than 14 times higher than they were in 2022. It would take 58 months (more than 4.5 years) to sell the available stock at the current rate of sales.

Growing condo inventories have led to a reduction in prices for buyers. They have also led to lower rents as more condo owners compete for rental cashflows.

Between 2022 and 2025, average resale condo apartment prices declined by 13.4%. In the two years before 2022, these prices had risen by more than 19%.

These developments have resulted in existing condo project cancellations and discouraged any new construction. In 2024, cancellations were five-fold higher than they were in 2022. Fewer completions in the future will fuel underlying housing shortages, which means relief for buyers and renters is only temporary.