Toronto Preconstruction Condo Prices Decline as Unsold Units Reach Record High

Preconstruction condo prices in the Greater Toronto Area dropped by 15% in the last quarter of 2024, as sales hit their lowest point in nearly 30 years. This decline comes amid a growing surplus of unsold units, setting a new record for inventory levels.

The preconstruction condo market experienced its toughest year since the late 1990s, with fewer investors purchasing new units due to a lack of profitability. In 2024, only 4,590 preconstruction condos were sold in the Toronto and Hamilton regions, a significant 64% drop from 2023. This marked the third consecutive year of falling sales, with figures not seen since 1996.

Shaun Hildebrand, president of Urbanation Inc., stated, "The new condo market just experienced its toughest year in three decades."

In the final quarter of 2024, developers launched condo projects with an average asking price of $1,130 per square foot, down 15% from the same period in 2023. In Toronto, the average asking price was $1,153 per square foot, compared to $1,407 in 2023. In surrounding suburban areas, the price was $1,104 per square foot, a decrease from $1,183 the previous year.

Although prices had been declining since 2023, the most recent quarter saw the sharpest drop in two decades, according to Urbanation. In addition to price reductions, developers are offering incentives such as guaranteed rental income to attract investors. Historically, investors have made up over 70% of preconstruction condo sales, but their interest has dwindled as condo values have stagnated, and rental rates no longer cover mortgage payments, condo fees, and property taxes.

At the close of 2024, the number of unsold preconstruction condos—comprising units under development, in construction, and in recently completed buildings—reached a record high of 24,277 units. This represents a 6% increase from 2023 and is 50% higher than the 10-year average.

Urbanation forecasts that, at the current sales pace, it would take over five years to clear this surplus. In the fourth quarter, developers launched six new condo projects with a total of 1,829 units, but only 10% of these units sold. Over the past decade, developers typically launched an average of 6,123 preconstruction units per quarter, with a sales rate of 52%.

The slowdown in investor demand has coincided with the completion of thousands of new units. In 2024, 106 condo buildings were completed, totaling 29,800 units—a record high, surpassing 2023 by 24%. This trend is expected to continue in 2025, with an estimated 112 buildings totaling 30,793 units.

Hildebrand predicts that 2025 will be another challenging year for the preconstruction condo market, with investors continuing to struggle financially. This, in turn, is likely to result in a sharp decline in new home construction, as a lack of condo sales translates to fewer new projects in the pipeline. The slowdown comes at a time when federal and local governments are focused on increasing the supply of affordable housing.

New condo construction has already begun to decline. In 2024, 22,616 new condo units were started in the Toronto region, a 21% decrease from the previous year. In Hamilton, condo starts dropped by 39% to 1,340 units.

As the preconstruction condo market navigates these turbulent times, it's important for both investors and homebuyers to stay informed and make strategic decisions. If you're considering entering the market or exploring your options in the Toronto and Hamilton areas, now may be the right time to speak with a real estate expert who can guide you through the current landscape.

Contact us today for insights and advice tailored to your unique needs. Don't miss out on potential opportunities—let's navigate this market together. Reach out now to learn more!