GTA New Condo Sales Slow in Q2
Greater Toronto Area (GTA) new condominium sales totaled 6,792 units in the second quarter, declining 19% from the first quarter and 24% year-over-year but remaining above the 10-year average of 6,302 sales. Activity was supported by the launch of 9,924 new presale condos in Q2, which represented the third highest volume of new units brought to market on record, exceeding the 10-year average (6,937) by 43%. The absorption rate for new projects launched in Q2 declined to 57% — down significantly from the 81% rate recorded during both the previous quarter and in the same quarter last year but only slightly below the 10-year average of 60%.
At 11,703 units, the number of unsold new condominiums in the market rose 36% from the 18-quarter low in Q1 (8,630), although declining 6% annually and remaining 20% below the 10-year average (14,579).
New condo prices for available units continued escalating to reach a record-high average of $1,453 psf in Q2-2022, up 4% quarter-over-quarter and 20% year-over-year, partly the result of an increase in inventory at higher-priced projects. As developers grapple with quickly rising construction costs, labour shortages, large increases to development charges, higher interest rates, and lengthy approval timelines, there appears to be little, if any, room for new condo prices to adjust lower in the current environment. Furthermore, the mild decline in condo resale prices thus far, which decreased 4.9% from a high of $988 psf in Q1 to $940 psf in Q2, and still low inventory levels aren’t creating an urgency for price reductions for new units.