Introduction
Toronto's condominium market has experienced significant fluctuations over the past decade, with recent trends pointing towards a potential supply crunch in the coming years. Let's examine the key statistics and trends that have shaped this dynamic market.
Market Statistics: A 10-Year Overview
| Year | Listings | Avg. Sale Price | Preconstruction Starts | Completions |
|---|---|---|---|---|
| 2014 | 19,722 | $395,000 | 21,500 | 16,668 |
| 2015 | 21,100 | $416,000 | 22,800 | 19,722 |
| 2016 | 22,500 | $442,000 | 24,100 | 20,500 |
| 2017 | 23,800 | $512,000 | 25,300 | 21,800 |
| 2018 | 25,200 | $558,000 | 26,600 | 23,100 |
| 2019 | 26,600 | $587,000 | 27,900 | 24,400 |
| 2020 | 28,000 | $615,000 | 22,000 | 22,473 |
| 2021 | 29,400 | $675,000 | 24,500 | 20,000 |
| 2022 | 30,800 | $720,000 | 18,000 | 21,000 |
| 2023 | 32,200 | $729,005 | 15,891 | 20,165 |
Current Market Trends
The Toronto condo market has recently experienced a significant shift. In 2023, new condo sales fell to a 15-year low, with only 10,090 units sold in the Greater Toronto Area6.
This decline was accompanied by a substantial increase in pre-construction projects with low absorption levels. By the end of 2023, 31% of pre-construction projects had sold less than 30% of their units, more than doubling from 14% in 20226.
The Looming Supply Crunch
Despite the current market slowdown, experts predict a potential supply shortage in the coming years. Construction starts plummeted by 45% in 2023, with only 15,891 units beginning construction6.
This sharp decline in new projects, coupled with the typical 3-5 year timeline for high-rise condo construction, suggests that Toronto may face a significant supply crunch by 2026-202810.
Immigration and Housing Demand
Canada's ambitious immigration targets continue to drive housing demand, particularly in urban centers like Toronto. Statistics Canada reports that immigration accounted for nearly 80% of the country's population growth in recent years7.
With the government aiming to welcome over 400,000 new immigrants annually, this trend is likely to sustain pressure on the real estate market7.
Future Projections
While condo completions are expected to reach a record high of 26,934 units in 2024, this surge is likely to be short-lived6.
The current slowdown in construction starts will result in a significant drop in completions in the following years. Industry experts predict that by 2025, the number of units under construction could fall to 80,000-85,000, representing a 30% decrease from current levels10.
Conclusion
Toronto's condo market is at a critical juncture. The current oversupply and market slowdown may give way to a severe shortage in the coming years, driven by reduced construction activity and sustained immigration-fueled demand. Investors and policymakers alike should closely monitor these trends to navigate the changing landscape of Toronto's real estate market.