Though higher interest rates and unyieldingly prohibitive home prices have made Toronto completely unaffordable to all but a select few, the housing market has fared surprisingly well this year.

The market is on track to see more activity and even higher prices in the months to come — that is, with the exception of one segment.

Condos, usually the entry point for first-time homeowners, are not seeing anywhere near as much interest as they once did, and builders are slowing construction as a result.

Per the latest stats from the real estate analysts at Urbanation, new condo sales in the Toronto area have slowed to a crawl, dropping to a low not seen in 15 years.

With only 1,461 units sold in the GTHA during the first quarter of 2024, the firm writes that the market is in the second-worst slump since the financial crisis of 2009.

"Outside of that brief period in early 2009, new condominium sales haven't been this low since the late 1990s," Urbanation's latest report, published Monday, continues.

"Sales were down 71 per cent when compared to the latest 10-year average for Q1 periods (4,978 sales), dropping 85 per cent from the Q1 high in 2022 (9,723 sales)."

Graph of how drastically Toronto's condo market has fallen from Urbanation.

In response to this dismal level of activity, developers are "dramatically" pulling back on launching new complexes in and around the city, with 75 per cent of new condo buildings opened so far in 2024 debuting in York Region rather than Toronto proper. 

Unsold inventory of new condos in the region now sits at around 22.8 months of supply or 23,815 homes (30.6 months of supply in the 416 specifically), with the number of unsold, never-lived-in units increasing by 124 per cent in the last two years.

Developers across the region were operating in this last quarter with only half of pre-construction units pre-sold, which is substantially less than the same time last year (when 61 per cent were pre-sold) and in 2022 (when 85 per cent were pre-sold).

As Urbanation notes, "with pre-construction sales falling well below typical construction financing requirements of at least 70 per cent absorption, construction starts have experienced a sharp decline." Some 60 buildings that were due to open this year have also halted progress in wait.

New construction starts are now down 52 per cent versus the same time in 2023, though a whopping 12,132 units from earlier projects came to market as all levels of government continue to decry the lack of housing supply for a too-rapidly expanding population in an overpriced market.

People losing it over videos showing how unlivable Toronto's condos have become https://t.co/afqQlVOgcy

— blogTO (@blogTO) March 12, 2024

"The market for new condominiums started 2024 where it ended off in 2023 — very slow. After two years of pre-construction sales trending down sharply, construction activity is being hit hard," Urbanation's staff write this week.

"While anticipated reductions in interest rates in the second half of the year should lead to some improvement in market conditions for new condominiums, activity will likely remain subdued as the industry works it way through current inventory and digests the numerous government policies on housing recently released."

Prices for new units are falling somewhat, now at $1,168 per square foot, largely due to the fact that most new units are outside of the city. This number marks a 12 per cent decrease from the last quarter of 2023, and a 17 per cent fall from the record high seen in Q1 2023.

Meanwhile, sales of luxury mansions and other types of homes in and around Toronto are back on the up after a brief lull last year.