Urbanation just released its Q2-2025 condominium market survey results for the Greater Toronto & Hamilton Area. The results are as expected: new home sales are slow (like, 91% below the 10-year average) and unsold inventory is rising. But what I'm most interested in is trying to guess the future.
Urbanation expects a total of 17,117 condominium homes to complete in the second half of this year, which would bring total completions for 2025 to 31,422 homes (which is an elevated number). Completions in 2026 are then expected to drop to a more "historically normal level" of 18,037 units.
At the same time, there are 64,623 condominium homes under construction as of Q2-2025. I take this to mean that, once the above 17,117 homes complete in the second half of this year, there will be at least 47,506 new homes still under construction as we start 2026.
If we do end up completing 18,037 units next year, and ignoring any new starts, that will leave just under 30k units under construction into 2027. If completions remain at a similar level after this, we could then be close to building our way through this condominium pipeline by the end of 2027.
Of course, this says nothing about actual absorption. It's one thing to build a new home, but it has to ultimately get filled. And right now, there are almost 2,500 unsold condominium apartments in newly completed projects across the region. This is a record high going back as far as 2005.
So it's hard to say. But my view continues to be that, by 2028, we should be on the other side of this market. In the meantime, if you're looking for a place to live in Toronto, I think you'd be hard pressed to find a better time to buy. Most people will be too scared, and that's the point.
Cover photo by Venrick Azcueta on Unsplash
The Globe and Mail just published this piece about job cuts across the real estate industry. And pictured in the article is my friend Norm Li, who runs a renowned visualization company here in Toronto, but just recently had to lay off 75% of his team.
This is sad — and quite a departure from the way things were before 2022. You used to have to book Norm and his team many months in advance just to get in the queue. That's how busy they were creating visual content for the architecture and development industry.
But there's not much you can do when the market more or less shut offs. And Norm is not alone. The article estimates that there are some 536,300 jobs in the new construction sector in Canada. And based on the way the above chart is looking, up to 170,000 of these jobs are currently at risk of disappearing.
Vancouver is in the same boat as Toronto. The Globe and Mail recently reported that the number of newly completed, unsold condominium suites in the city is expected to increase to 3,493 by the end of this year, which would be a 60% increase compared to the end of last year and one of the highest levels of unsold inventory in recent times.
The profound change, as we know, is that individual investors have largely left the market. Also in the article is some commentary from Ryan Berlin, who is head economist of Rennie Intelligence. According to Rennie's data, investors made up about 50% of their buyers from 2020 to 2023. In 2024, this number dropped to around 25%. And so far this year, the number is ~7%.
At the same time, the math is not mathing for developers:
Real estate appraiser David Eger, vice-president of Western Canada for Altus Group Ltd., gave the example of an older Vancouver apartment block within the Broadway Plan that is currently on the market for $12.2-million. To achieve a profit margin of 10 per cent of total costs to redevelop the site, the developer would have to pay drastically less, around $3-million for the property. That’s based on a rent of $5.50 per square foot, or $3,300 a month for a 600 square-foot unit.
In some ways, all of this is what housing critics wanted: "Too many speculative investors are buying new homes and outbidding actual end users." But now they're not. So where are all the end users? Aren't we in a housing crisis? This is the paradox of our current market. But I think the lesson is that a housing crisis does not necessarily equal a housing shortage in all segments of the market.
Another way to think about it is that the inventory that is now accumulating has lost
Urbanation just released its Q2-2025 condominium market survey results for the Greater Toronto & Hamilton Area. The results are as expected: new home sales are slow (like, 91% below the 10-year average) and unsold inventory is rising. But what I'm most interested in is trying to guess the future.
Urbanation expects a total of 17,117 condominium homes to complete in the second half of this year, which would bring total completions for 2025 to 31,422 homes (which is an elevated number). Completions in 2026 are then expected to drop to a more "historically normal level" of 18,037 units.
At the same time, there are 64,623 condominium homes under construction as of Q2-2025. I take this to mean that, once the above 17,117 homes complete in the second half of this year, there will be at least 47,506 new homes still under construction as we start 2026.
If we do end up completing 18,037 units next year, and ignoring any new starts, that will leave just under 30k units under construction into 2027. If completions remain at a similar level after this, we could then be close to building our way through this condominium pipeline by the end of 2027.
Of course, this says nothing about actual absorption. It's one thing to build a new home, but it has to ultimately get filled. And right now, there are almost 2,500 unsold condominium apartments in newly completed projects across the region. This is a record high going back as far as 2005.
So it's hard to say. But my view continues to be that, by 2028, we should be on the other side of this market. In the meantime, if you're looking for a place to live in Toronto, I think you'd be hard pressed to find a better time to buy. Most people will be too scared, and that's the point.
Cover photo by Venrick Azcueta on Unsplash
The Globe and Mail just published this piece about job cuts across the real estate industry. And pictured in the article is my friend Norm Li, who runs a renowned visualization company here in Toronto, but just recently had to lay off 75% of his team.
This is sad — and quite a departure from the way things were before 2022. You used to have to book Norm and his team many months in advance just to get in the queue. That's how busy they were creating visual content for the architecture and development industry.
But there's not much you can do when the market more or less shut offs. And Norm is not alone. The article estimates that there are some 536,300 jobs in the new construction sector in Canada. And based on the way the above chart is looking, up to 170,000 of these jobs are currently at risk of disappearing.
Vancouver is in the same boat as Toronto. The Globe and Mail recently reported that the number of newly completed, unsold condominium suites in the city is expected to increase to 3,493 by the end of this year, which would be a 60% increase compared to the end of last year and one of the highest levels of unsold inventory in recent times.
The profound change, as we know, is that individual investors have largely left the market. Also in the article is some commentary from Ryan Berlin, who is head economist of Rennie Intelligence. According to Rennie's data, investors made up about 50% of their buyers from 2020 to 2023. In 2024, this number dropped to around 25%. And so far this year, the number is ~7%.
At the same time, the math is not mathing for developers:
Real estate appraiser David Eger, vice-president of Western Canada for Altus Group Ltd., gave the example of an older Vancouver apartment block within the Broadway Plan that is currently on the market for $12.2-million. To achieve a profit margin of 10 per cent of total costs to redevelop the site, the developer would have to pay drastically less, around $3-million for the property. That’s based on a rent of $5.50 per square foot, or $3,300 a month for a 600 square-foot unit.
In some ways, all of this is what housing critics wanted: "Too many speculative investors are buying new homes and outbidding actual end users." But now they're not. So where are all the end users? Aren't we in a housing crisis? This is the paradox of our current market. But I think the lesson is that a housing crisis does not necessarily equal a housing shortage in all segments of the market.
Another way to think about it is that the inventory that is now accumulating has lost
If you look at the comment section of the article you'll find that a lot of people either couldn't care less or actually relish the fact that the real estate industry is shedding jobs. A lot of people responded with "good." This is not at all surprising (and not just because it's, you know, a comment section). Homes remain unaffordable in Canada.
In the first quarter of this year, RBC estimated that the share of income needed to cover homeownership costs in Toronto is still averaging over 60%. And so for many/most people, the new construction sector isn't a source of personal utility; it's a creator of things that aren't affordable.
Oh, you can't make money anymore? Good.
But here's a better kind of "good" to consider: as painful as the current conditions are for everyone in the industry — myself included — the market is being forced into a reset. Among many other things, municipalities are rethinking their development charges, construction costs are coming down, and nearly every developer seems to be pivoting their new-home business toward bona fide end users (as opposed to investors).
What I think this means is that when the market does return — and it, of course, will — it is highly likely that it will be rooted in sounder fundamentals. And this, I would say, is good.
Cover photo by Maarten van den Heuvel on Unsplash; pre-construction home sales chart from the Globe and Mail
The challenge is that our industry and our cost structures are not currently set up to deliver this kind of product. In software, it's relatively easy to pivot in search of product-market fit. But it's not so easy in real estate. Using the above example from appraiser David Eger, you'd need a negative land value (i.e. a subsidy) in order to be able to feasibly deliver more affordable family housing. That is, larger homes at a lower per square foot rent.
But I think this is how all city builders should be thinking right now. We should be viewing this point in the cycle as an opportunity. It's an opportunity to ask ourselves: what does the housing market want and how could we actually deliver it? Then it's time to get creative and figure out how to pivot our collective product. There are, of course, lots of levers we can pull.
Cover photo by Nate Foong on Unsplash
If you look at the comment section of the article you'll find that a lot of people either couldn't care less or actually relish the fact that the real estate industry is shedding jobs. A lot of people responded with "good." This is not at all surprising (and not just because it's, you know, a comment section). Homes remain unaffordable in Canada.
In the first quarter of this year, RBC estimated that the share of income needed to cover homeownership costs in Toronto is still averaging over 60%. And so for many/most people, the new construction sector isn't a source of personal utility; it's a creator of things that aren't affordable.
Oh, you can't make money anymore? Good.
But here's a better kind of "good" to consider: as painful as the current conditions are for everyone in the industry — myself included — the market is being forced into a reset. Among many other things, municipalities are rethinking their development charges, construction costs are coming down, and nearly every developer seems to be pivoting their new-home business toward bona fide end users (as opposed to investors).
What I think this means is that when the market does return — and it, of course, will — it is highly likely that it will be rooted in sounder fundamentals. And this, I would say, is good.
Cover photo by Maarten van den Heuvel on Unsplash; pre-construction home sales chart from the Globe and Mail
The challenge is that our industry and our cost structures are not currently set up to deliver this kind of product. In software, it's relatively easy to pivot in search of product-market fit. But it's not so easy in real estate. Using the above example from appraiser David Eger, you'd need a negative land value (i.e. a subsidy) in order to be able to feasibly deliver more affordable family housing. That is, larger homes at a lower per square foot rent.
But I think this is how all city builders should be thinking right now. We should be viewing this point in the cycle as an opportunity. It's an opportunity to ask ourselves: what does the housing market want and how could we actually deliver it? Then it's time to get creative and figure out how to pivot our collective product. There are, of course, lots of levers we can pull.
Cover photo by Nate Foong on Unsplash
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