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

Last year, the Feds lowered immigration targets in response to Canadians getting grouchy about the number people entering the country. This is expected to be felt starting this year. RBC estimates that Canada's overall population will shrink by about 0.2% this year and next, before returning to positive growth in 2027 (albeit at a lower rate).

That said, the data we have at our disposal today is backward looking and for the 12 months ending on July 1, 2024, Canada continued to see impressive population growth. Looking at the Greater Golden Horseshoe specifically, it grew by about 382,000 people. The 2023 figure was also revised upward from 340,000 to 367,000.

Here's a table from TMU's Centre for Urban Research and Land Development:

Nearly three-quarters of this growth was concentrated in the Greater Toronto Area, and about three-quarters of this growth was concentrated in Toronto and Peel at 143,000 and 70,000 people, respectively. These are big numbers, especially during a period of dramatically fewer housing starts.

Of course, going forward, lower household formation should alleviate some of the pressures on our housing market. But zero population growth is not sustainable, not unless we want to end up like Japan with a demographic crisis. So there will be tremendous market pressures to return to positive growth.

At the same time, if we go back to RBC's insight report, it specifically says: "This [lower immigration levels] will help realign housing demand with supply — so long as homebuilding can be sustained near current levels." Yeah, that's not happening. Housing starts in the Toronto region have fallen off a cliff.

So I continue to feel like 2027 will mark an important turning point for our housing market. It could be the year when population growth broadly returns, when we've fully absorbed the supply from the last cycle, and when we suddenly realize we don't have nearly enough new housing. Or at least that's my view.

Cover photo by Richard Hong on Unsplash

Bullpen Consulting just released its Q3-2024 high-rise land report for the Greater Toronto Area. Here's a figure showing average high-density land prices (on a per buildable square foot) by quarter since 2018:

Here's their summary data broken out by Toronto versus the Greater Toronto Area:

And here's a list of all the land transactions last quarter:

At the highest level, the average high-density land trade last quarter across the GTA was at around $98 per buildable square foot. This is down 13% from $112 pbsf in Q3-2023. And going back to the first chart in this post, there also seems to be a longer-term decline in high-density land prices.

But as Bullpen rightly points out in their report, there are limits to what can be gleaned from data like this. And that's because land transactions can be structured in countless ways. Did the vendor provide cheap financing? Was there a delayed close? Are there any unique site conditions that could be impacting value? The list goes on.

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.

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Figures: Bullpen Research & Consulting