Dozens of condo projects that were expected to launch in the Greater Toronto Area (GTA) this year have been shelved, according to new data from Urbanation.
The Toronto-based research and consulting firm estimates that around 40 projects have been delayed as of the third quarter of this year. Collectively, those projects would have added 13,721 new condo units to the region’s housing market.
Urbanation President, Shaun Hildebrand, says that “elevated interest rates” and “heightened market uncertainty” weighed heavily on the GTA’s new condo segment last quarter.
“While some new launches with competitive price points have seen success, many projects have been unable to make an economic case for proceeding in the current market, causing more supply to be put on hold,” Hildebrand explains.
Though 2,491 units were successfully launched for presale in Q3 2023, that figure is down 23% annually. As well, year-to-date presale launches, at 13,197 units, are down 36% compared to the first nine months of 2022.
Sales activity in the quarter was sluggish as a result, with just 2,664 new condo units sold. Though that figure is up 41% from its year-ago measure, it also marks the second-slowest third quarter on record in 20 years. More than half of Q3 sales were concentrated in the 905 regions “as buyers and developers focused more of their activity on lower priced locations,” Urbanation also notes.
As well, on a year-to-date basis, 9,568 new condo units changed hands. That figure is down 47% compared to the first nine months of 2022, and is the lowest it’s been in a decade.
Despite a “recent pick-up” in new presale launches — Urbanation says that 19 condo projects and 6,916 units have been brought to market so far in Q4-2023 — slower sales are expected to have a prolonged impact on new condo supply moving forward.
“As presale activity typically impacts construction starts with a 12- to 18-month lag, the slowdown in new condo sales that began in the second half of 2022 is expected to continue weighing on construction starts in the coming quarters,” says the firm.