It is decidedly an exceptionally bad time to try and sell or build condos in the GTA, as purchases of the housing type have fallen to record lows, dropping in June to 70 per cent below the 20-year average.

With such little activity, some ongoing projects are going into receivership as pre-construction sales struggle to cover building costs. Others are being completely put on hold until the market improves — progressively more of them, too.

People finally understood that paying 1 million dollars in a two-bedroom box to live tight and without space is a crazy thing.

— A Disney já Flopou hoje? (@FCanadense) May 10, 2024

As of this summer, Urbanation data sourced by Storeys shows that 76 new residential complexes that were due to add more than 24,000 homes to the region since late 2022 have now been halted indefinitely.

These are buildings that have been underway for years, and were in various stages of coming to fruition, leaving hopeful owners to wonder about the future of their units — and their financial investment.

It's the savvier investors with whom presale condos are usually the most popular (for just that, investment purposes) that have simply been foregoing the market due to current costs, between the high prices of units for what they are, rising maintenance fees and exorbitant land transfer and property taxes.

As Urbanation and CIBC explain in a report about the sector this week, "the GTA condo market is in a state of economic lockdown. The math doesn't make economic sense from both the demand side (investors) and the supply side (developers), leaving the market at a standstill."

"Prices are too high for investors to buy given current resale prices, rents, and interest rates, while developers can't lower prices due to high construction costs. As a result, new condo sales — the primary driver of new home construction in Canada's largest market — have dove off a cliff to their lowest level since the late 1990s."

Prices are still too high for buyers to justify, and construction is down. Chart from CIBC's latest market report.

It goes on to say that developers will not confidently move forward with work on a given build until 70 per cent of units are sold. The number of projects reaching this mark lately has been less than 50 per cent, signifying a 20-year low.

As groups like the Toronto Regional Real Estate Board advocate for lessening taxes, development charges and red tape, others, like CIBC, are calling for more purpose-built rental supply to offset the rental market's reliance on condo investor-landlords.

Lower the prices then

You know supply and demand

— jack mcgraw (@redmcgraw1) May 6, 2024

Newly lowered interest rates should help somewhat, and even with so much supply on the market, experts still anticipate home prices in the region spiking higher in the coming months.