The last time I shared Bullpen & Batory Consulting's Land Insights report for the Greater Toronto Area was back in Q3-2024. And at that time, the average high-density land trade across the GTA was being reported at roughly $98 per buildable square foot. However, I ended my post by saying this:
So even though prices and transaction volumes are down (which is what one would totally expect right now), it still doesn't feel like this data accurately reflects what's going on in the market today. I think the reality is worse.
Following that post, a few friends in the industry reached out and said, "The reality is much worse!" Yup. But now reality is starting to become more visible in Bullpen's data. For Q2-2025, they are now reporting an average land price of $52 per buildable square foot across the GTA.
This was gleaned from 15 sales recorded last quarter and represents the lowest quarterly figure since Bullpen and Batory started tracking sales in 2017. But even at these lower prices, it's extremely difficult to accurately value development land. All we can say with certainty is that land prices are trending lower and that lower more accurately reflects the current market.
Last year, I wrote that development value has shifted from land to the build. That's still very much the case, but now you're seeing it in the above chart in a meaningful way.
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Cover photo by Viktoriya Beshovishka on Unsplash
At the end of last year, I wrote this post arguing that development value has shifted from land to the build. And in it, I argued that it's no longer viable to be a high-density land developer in Toronto. The practice of buying land, rezoning it for a higher-and-better use, and then selling it for a margin, is over — at least for the time being.
It's also not easy to find value in the execution of new builds, but it's a better place to be looking. Because today, as we underwrite new development sites, we are seeing land prices (on a per buildable square foot) that are similar to what they were back in 2017 when we were assembling the land for Junction House. Meaning that, in some cases, land prices have been nearly flat over this 8 year period. This is despite a total inflation rate of approximately 25% and an average annual decline in the value of money of 2.86%.
This is not all that surprising, though. Land should, in theory, be the residual claimant in a development pro forma; so it should be one of the first things to reset during a market downturn. However, in the past, I have referred to land prices as being sticky in the face of changing cost structures, such as development charge increases and/or new inclusionary zoning policies. So which is it, Brandon?
Well, one way I think about this is that land prices tend to be sticky in the short term. Nobody wants to immediately take a loss. And as long as prices/rents continue to exhibit strong growth, there's a chance that these new costs will get absorbed into somebody's pro forma and that land prices won't need to adjust downward. But turn off demand and reverse price/rent growth, and now there's no other option but for land prices to come down.
This is what we've been seeing in Toronto since 2022.
Cover photo by Adam Vradenburg on Unsplash
I have vivid memories of being in a broker meeting many years ago talking about development land in Vancouver. Our team's comment was that it felt expensive. I mean, Toronto was expensive, and Vancouver was even more. Why? It has one-third the GDP of Toronto. The response we got was something like this: "Yeah, Vancouver may seem pricy, but you just need to get into the market. Then in 5 years you'll be happy you did."
Well it's been more than 5 years and now this is the market:
The market for development sites is being tested by a roughly 50-per-cent drop in value since 2022, according to Mark Goodman. The principal of Goodman Commercial Inc. said Broadway Plan sites, for example, were selling for about $200 per square foot buildable three years ago. Sellers can now expect closer to $100 per square foot buildable, he told BIV. Goodman currently has three Broadway Plan listings.
Of course, Toronto is in a similar situation today. If there's no market for new condominiums and apartment rents aren't growing, then high-density land values are going to feel the impact. But I do think it's interesting that, in some ways, our response was being anchored by our experience in Toronto. What we know, and have accepted, often becomes a baseline for assessing if something else feels expensive or cheap.
I sometimes see the same thing with long-time developers. They remember what they used to sell and/or rent apartments for, and have a harder time accepting today. But this is a positive thing if it compels greater deal scrutiny. Advice like "you just need to get into the market" is never sound. But if you were to take this approach, I would bet that today is a better time than 5 years ago.