Urbanation just released its Q1-2025 condominium market survey results for the Greater Toronto & Hamilton Area (GTHA). Here's how things are looking:

The entire GTHA recorded 533 new condominium sales and the City of Toronto recorded 215 new condominium sales in the quarter. Once again, and as you can see above, this is the lowest level since the early 90s.

For all intents and purposes, I think you can look at these sales figures as mostly representing a zero. The numbers are relatively small and a sale doesn't necessarily equate 1:1 to an eventual new home. The sale needs to be within a project that achieves its requisite pre-sales for construction financing.

Since the beginning of 2024, Urbanation has tracked a total of 5,734 pre-construction condominiums that have been put on hold, cancelled, placed into receivership, or converted to purpose-built rental.

So where does this leave us? It leaves us with:

• 69,042 condominium homes under construction across the GTHA

• 10,934 unsold condominiums in pre-construction projects

• 11,073 unsold condominiums in projects under construction

• 1,911 unsold condominiums in completed projects (standing inventory)

One hypothetical could be that many/most of the projects currently in pre-construction never actually make it to construction, which would mean that the above 10,934 condominiums just disappear from the market. For argument's sake, let's assume this happens. That would leave projects under construction and standing inventory.

Of the condominium's currently under construction, 11,073 are unsold, which represents about 16% of the total. For the units that have sold, some will belong to end users, some will belong to investors who have an ability to close, and the rest will be buyers who, frankly, don't want to close or who can't close.

I don't know what this latter percentage might be, but let's say that 40% of the condominiums sold and under construction become a problem and need to be "reabsorbed" in the market. That is, they need to find new buyers. That would equal 23,187 condominiums (and hopefully I'm being very conservative). In this scenario we would have:

• 11,073 unsold condominiums in projects under construction

• 23,187 condominiums that become a problem and need to reabsorbed in the market

• 1,911 unsold condominiums in completed projects

• Total of 36,171 "unsold" condominiums

So, how long will it take to absorb these new homes? I don't know. It depends on a bunch of factors, including immigration. But I think we need at least 2 more years just to physically deliver the homes that are currently under construction. Then there may be a period of reabsorption. That continues to suggest to me that 2028 could be the year where we're on the other side of this.

Cover photo by Brian Jones 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

CIBC Deputy Chief Economist Benjamin Tal was recently interviewed by Larysa Harapyn of the Financial Post about the state of the housing market in the Greater Toronto Area. The message he delivers is pretty clear: "If you think that Toronto is unaffordable now, you wait." The long-term fundamentals in this market remain strong. Demand is outstripping supply and will likely continue to do so, which is why Tal also stresses the importance of delivering more purpose-built rental housing. If you can't see the video above, click here. (And with that, I think it's time to switch topics for tomorrow's post. That's enough Toronto housing for one week.)