When it comes to high-rise condo launches in the Greater Toronto Area (GTA) this year, the market has been pretty quiet. In fact, until just a few days ago, it hadn't made a single peep.
On Friday, developer Greenpark Group launched sales for their 25-storey Richmond Hill development, Evelyn Condos at Rise & Rose, but prior to this, there hadn't been a high-rise condo launch in what is now almost the first two months of the year. Anyone familiar with the development cycle knows that the colder winter months can be quiet — but they're never this quiet.
In fact, Elliott Taube, Principal at pre-construction sales and marketing firm Pivot Real Estate Group, says this is first time he can remember the GTA going this long without a new high-rise build coming onto the market at the beginning of a year.
"In the history that I've been doing this, somebody was always out of the gate first in the year because they felt it was a reset after the end of the previous year," Taube said of high-rise launches in the GTA. "People were ready to go again, builders were ready."
Data provided to STOREYS by Altus Group backs up Taube's observations. No other year on record has made it this far into February without a high-rise launch. In 2009, the first high-rise condo launch didn't come until February 1, followed by a second launch on February 21 (although both ended up being cancelled at a later date). The third launch to come that year, when the world was still recovering from the 2008 financial crisis, wasn't until April 4. Notably, that launch did come to fruition after selling out by March 2010.
The only other year when a January came and went without any new high-rise launches was in 2000, where the first two projects of the year launched on February 1 and 2.
Interestingly, 2024's lack of launches isn't the result of a steady month-over-month decline throughout 2023, either, Taube says. Instead, it was much quicker drop off, with launches actually having surged as recently as the fall. Ed Jegg, Research Manager at Altus Group, notes that in October alone, there were 11 high-rise launches — something that pushed inventory to its "highest level since early 2016 and well above the 10-year average... for October," he said.
Back in the fall, Jegg said developers "are testing the waters with new launches, gauging whether buyers are ready to re-engage." But sales remained hard to come by, and developers started to realize that it may not be a good time to launch.
"There were, say, 30 launches in the fall, of which almost nobody did very well," Taube said. "The expectation of coming out and getting 30, 40, 50, 60% of your sales done, nobody was able to hit that."
Taube does point to two exceptions, Lifetime Developments and Diamond Corp's Q Tower in Toronto and CentreCourt's Pickering City Centre Tower 1. (It's worth noting, however, that the Pickering development was priced at roughly $100 per sq. ft below market value.)
To put some numbers on it, in October, new condo apartment sales, while up from the previous year, were still down 29% from the 10-year average, according to a data from Altus Group. This left 16,362 units of unsold inventory at the end of the month. By December, new condo apartment sales were down an even more depressed 66% from the 10-year average, leaving an even higher 16,850 units unsold.
When exactly high-rise launches will pick back up is hard to say, with seemingly just one tower — Freed Development's planned $800M hotel and residences in downtown Toronto — expected to launch in the next couple of weeks. And it's not for a lack of planned projects. Dozens of developers with fully crafted plans that were expected to launch their buildings last year chose to hold off until 2024. One report from Urbanation, released in November, estimated that around 40 projects in the GTA have been put on hold.
"There's a ton in our pipeline alone, we've got thousands of units to launch," Taube said. "When we will bring them out, we don't know. I've got sales offices sitting ready with creative, brochures, everything is done, but if you can't sell it, there's no use in bringing it out."
Although there's been an upswing in overall home sales in the GTA, that renewed interest has largely been in the re-sale market. In fact, just last month, new home sales hit a near quarter-century low, Jegg said.
Low- and mid-rise pre-construction homes have seen a bit more success, prompting a few new projects to come onto market this year — Mattamy Homes launched its eight-storey Mile & Creek Phase 3 in Milton earlier this month, for example. Notably, low-rise projects typically have a much shorter closing (18 to 24 months) compared to high-rise (four to six years), something that could be appealing to many buyers.
Even with such disappointing numbers for the start of the year, Taube is optimistic that this high-rise lull is part of the cycle, and means good things are on the horizon.
"Resale went first, we saw that low-rise is the natural next step, and then high-rise will come back," he said.
