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Market Insight for April 24
Canada’s largest condominium market has “hit bottom” as first-quarter sales for new projects in Toronto fell 52 per cent from a year ago to a 35-year low, according to the Urbanation Inc. report, and no projects were launched for the first time in three decades in this period.
“What stood out here was that there was for the first time in decades zero new project launches; the market basically came to a standstill,” Shaun Hildebrand, president of Urbanation, said. “It’s probably safe to say that we’ve hit the bottom.”
As the condo market downturn entered its fifth year, sales declined to a new 35-year low. In Q1-2026, 246 new condominiums were sold in the Greater Toronto Hamilton Area (GTHA), down 52% annually and 94% below the 10-year average for Q1 periods (4,046 sales). For the first time in at least 30 years, there were no new project launches during the quarter.
A record-high 4,295 new condos were completed and unsold as of Q1, more than doubling the level from a year ago and nearly five times higher than two years ago. Based on sales during the previous 12 months, there was 92 months of completed new condo supply on the market, which doesn’t fully account for units that were presold but the buyer failed to close. Additionally, 8,629 unsold new condos were under construction and slated for completion in the next couple years.
Developers lowered asking prices for standing inventory to an average of $1,189 per square foot (psf) in Q1, a 5% decline from a year ago and a 13% decrease from the high three years ago. However, resale units in comparable buildings registered within the past three years averaged a selling price of $859 psf in Q1-2026, a 25% drop from the market peak in Q1-2022. As a result, the gap between asking prices for developer-owned new condos and resale units remained at a record high 38% in Q1.
However, the recently announced full HST rebate for one year is estimated to lower prices for unsold new condos by an average of approximately $100,000, reducing the price gap between new and resale condos down to 20%.
“Condo developers are losing money by bringing prices that low,” he said. “Some are more willing than others to let these units go for a significant discount compared to what they were sold for previously.”
But Hildebrand expects some developers will rent out their condo units because the new HST rebate rules allow them to do that.
Developers were also taking the steps of cancelling condo projects and converting them to rental. Since the start of 2024, 11,424 condo units were cancelled. Just over 4,000 were converted to purpose-built rental, Urbanation said.
Another thing that will help the condo market is falling inventory.
Urbanation estimated that 21,850 units in 2026 will be completed, down from 29,616 units in 2025 and 29,924 units in 2024. It expects that number to continue to drop throughout the decade to around 2,000 completions in 2029.
“That’s the biggest drop in supply we’ll ever experience,” Hildebrand said. “That should help to stabilize the market.”
A total of 963 units were cancelled in Q1, all of which are being converted to purpose-built rental. Since the start of 2024, a total of 11,424 condo units were cancelled, of which 4,064 units were converted to purpose-built rental, resulting in a net removal of 7,360 units.