GTA Condo Market Update: Declining Construction, Sales, & Absorption Rates

What It Means for Buyers & Investors

The Greater Toronto Area (GTA) condo market is shifting rapidly, with fewer new projects being launched, declining condo sales, and a slowdown in absorption rates. Whether you’re a buyer, investor, or seller, understanding these market trends is essential for making informed real estate decisions.

  1. Fewer Condos Under Construction: A Supply Crunch Ahead?

The number of condos under construction in the GTA peaked at 104,751 units before falling to 78,742 units in Q4 2024. This significant drop signals a decline in developer activity, which could impact housing supply in the near future.

Why is Construction Slowing?

  • Rising construction costs and supply chain issues.
  • Tighter financing conditions for developers due to higher interest rates.
  • Weaker pre-construction sales, making it harder for projects to move forward.

Impact on Buyers & Investors:

  • Fewer new builds mean that existing condo inventory will become more valuable in the long run.
  • Expect higher demand for resale condos as new developments slow down.
  • Developers may offer more buyer incentives to encourage pre-construction sales.
  1. Condo Sales Are Declining

Annual new condo sales have dropped significantly in the past couple of years, moving below historical averages. This decline is due to:

  • High borrowing costs from increased interest rates.
  • Economic uncertainty, leading buyers to delay purchasing decisions.
  • Affordability concerns, as rising inflation impacts purchasing power.

Opportunities in the Market:

  • Buyers may find better deals on pre-construction condos, as developers adjust prices or offer incentives.
  • Investors can take advantage of reduced competition and future appreciation potential when the market rebounds.
  1. Project Openings & Absorptions: A Dramatic Decline

The number of new project launches and absorption rates (the percentage of new units sold) has plummeted in 2024. The absorption rate, which once hovered around 70-80%, has now dropped to around 30-40%.

Why This Matters:

  • Developers are launching fewer projects, leading to a potential long-term supply shortage.
  • Unsold inventory may lead to price stagnation or slight corrections, benefiting buyers in the short term.
  • A lower absorption rate means buyers have more choices and negotiating power than in past years.

What This Means for the Future

The GTA condo market is shifting toward a buyer’s market in the short term, but long-term demand for housing remains strong. This slowdown in construction and sales could lead to:

✔ More competitive pricing and incentives for buyers now

✔ Potential price increases in the future due to limited supply

✔ Opportunities for investors to buy when prices are stable before demand surges again

Final Thoughts: Is Now the Time to Buy?

If you’re considering buying a pre-construction or resale condo, this may be the right time to take advantage of developer incentives and lower competition. The market slowdown won’t last forever, and with fewer condos being built, today’s buyers may benefit from higher property values in the future.

Want to explore the best condo deals in the GTA? Contact me today for expert advice on navigating the shifting real estate market!