In what has been a common tune for a while now, the Toronto Regional Real Estate Board's (TRREB) Condo Market Report for the third quarter of 2024 is posting dwindling sales, growing inventory, and a declining price point for condominium apartments in the Greater Toronto Area.
Over the course of 2024, high borrowing costs have led to historically low condo sales across the GTA and a surplus in inventory that, earlier this month, Urbanation President Shaun Hildebrand estimated now sits at just under 40,000 units. “At current sales levels it would take over 50 months to absorb all the supply available in the new and resale condominium markets,” Hildebrand said in an interview with STOREYS.
This is the context within which we receive TRREB's Q3 data. According to TRREB, total Q3 condo sales amounted to 4,204 transactions, down 4.4% year-over-year. In comparison, a substantial 14,721 new condo listings were added, representing a 10.6% year-over-year growth.
To get an even bleaker image of where demand for condominiums in the GTA stands, look to the new condo market, where sales clocked in at just 567 in Q3 — the lowest quarterly sales volume since Q1-1995 and an 81% year-over-year drop off.
At the same time, low demand means better conditions for buyers. Not only do they have more negotiating power, but as supply builds, prices are coming down. In Q3, the average GTA condominium apartment price dipped by 3.3% annually — or by $23,807 — to $692,672. In Toronto, it dropped from $737,035 in Q3 2023 to $713,801.
Though, TRREB Chief Market Analyst Jason Mercer warns the conditions won't last forever. “As condo market conditions start to improve in the months ahead, we will start absorbing the large standing inventory of listings that built up over the past year," he says. "Ultimately this will lead to tightening market conditions and renewed price growth, but this will become more of a story as we move through 2025."
Driving improved market conditions, of course, are the string of previous and expected rate cuts that, together, are projected by experts to bring the interest rate down to 2% by July 2025. As the monetary policy eases, buyers will begin entering the market in higher numbers than they are now.
"While condo sales remained low in the third quarter, market conditions are expected to improve," said TRREB President Jennifer Pearce. "As the positive impact of interest rate cuts continues to grow, a growing number of renters will likely make the move into homeownership. Many of these households can initially start to take advantage of lower borrowing costs and lower home prices, thereby making their monthly payments more affordable."
