Urgent Update: GTA Condo Sales Plunge 44% in September 2024

UPDATE: New reports confirm that condominium sales in the Greater Toronto Area (GTA) have plummeted by 44% in September 2024 compared to the same month last year. Just 155 new condos were sold, marking a significant downturn in the housing market that demands immediate attention.

According to a report released by the Building Industry and Land Development Association (BILD) on Tuesday, only 53 condos were purchased in the City of Toronto alone. This alarming trend signals a broader crisis in housing supply that could have serious repercussions for the market in the coming years.

“The trend we saw in September has been ongoing for the past couple of years, affecting both condominiums and single-family homes,” stated Dave Wilkes, president and CEO of BILD. He emphasized that this is not merely a condo problem but a comprehensive “housing problem” across Canada, exacerbated by soaring construction costs that the market cannot currently absorb.

An eye-opening statistic reveals that a total of 1,538 condos have sold in the GTA up to September, a staggering 60% decrease from 2024 levels. This figure is also 90% below the 10-year average for the region, revealing a dire situation for prospective buyers.

Sales have dwindled significantly outside Toronto as well, with only 15 condos sold in Durham, 35 in Halton, 43 in Peel, and 9 in York. Victor Tran, a mortgage and real estate expert at Rates.ca, noted that many new condo developments are on hold or canceled entirely due to insufficient buyer interest in pre-construction properties.

The overall decline in real estate sales is stark, with just 438 properties sold last month, a 29% reduction from September 2024. Despite the low sales, the benchmark price for a new condominium apartment remains steady at $1,033,317, creating a paradox where prices do not reflect the declining demand.

Inventory levels have slightly decreased, with 15,875 condos and 5,874 single-family homes available in the GTA, representing a combined inventory level equivalent to 22 months of sales. This is the highest level observed to date, raising concerns about potential housing shortages if new constructions do not resume soon.

“Today’s sales are tomorrow’s starts,” Wilkes warned. He stressed the urgent need for government action to stimulate the market, citing Ontario’s recent decision to waive the HST on new homes up to $1 million for first-time buyers as a positive step.

Tran elaborated on the challenges faced by potential condo buyers, stating,

“Buying a condo and waiting years for completion while uncertain about job security is a daunting prospect.”

He believes the new construction condo market will continue to struggle, especially with ample resale inventory available.

The lack of action could lead to severe housing shortages by 2027 and 2028, impacting affordability and market stability. With construction costs remaining prohibitively high, stakeholders are increasingly concerned about the future of the housing market in the GTA.

As the situation develops, industry experts urge immediate governmental intervention and innovative solutions to alleviate the mounting pressures on housing supply. The urgency of the matter cannot be overstated, as the current trajectory could lead to long-lasting ramifications for both buyers and the broader market.