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The Greater Toronto Area (GTA) condo market is currently experiencing its most significant downturn since the early 1990s, characterized by plummeting sales, escalating inventory levels, and widespread project cancellations. In 2024, new condo sales dropped to just 4,590 units—a 64% decline from 2023 and the lowest volume since 1996. This downturn reflects a broader "unwinding" of the speculative boom that had previously driven market growth. Despite these challenges, experts from CIBC and Urbanation suggest that the market is poised for a recovery, albeit in a more cautious and sustainable form.
According to a recent report by CIBC's Deputy Chief Economist Benjamin Tal and Urbanation's President Shaun Hildebrand, while current conditions are challenging, the condo market remains a vital component of the GTA's housing landscape. They argue that the sector is "too important for the housing market to stay down," noting that condos have historically accounted for a significant portion of new housing starts and rental additions in the region. The report indicates that the glut of unsold units is beginning to decrease, with projects being canceled or converted to rental use, signaling a potential stabilization of supply.
Affordability is emerging as a key factor in the market's potential rebound. Prices have fallen 19% since early 2022, and recent interest rate reductions, along with the introduction of 30-year insured mortgages for first-time homebuyers, have improved affordability. In the first half of 2025, sales of condos priced under $500,000 increased by 47% year-over-year, marking a four-year high. This uptick is attributed to private equity groups acquiring unsold units, with expectations that individual investors will follow suit as market conditions improve. Experts anticipate that as condos become more affordable relative to other housing types, demand will shift accordingly, leading to a more balanced and sustainable condo market in the GTA.
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