Toronto condo sales have plummeted to the lowest levels seen in almost three decades, in what one prominent real estate insider describes as the market's "toughest challenge in decades."

Urbanation released its Q3-2024 Condominium Market Survey results on Friday, providing an alarming look behind the curtain at a condo market teetering on the edge of peril.

According to the survey, only 567 new condominium units were sold in the entire Greater Toronto Hamilton Area (GTHA) — a region with a population of almost 7.3 million as of 2021 — during the third quarter of 2024.

This represents the lowest quarterly total since the first quarter of 1995, almost 30 years earlier, with a year-over-year decline of 81 per cent and a shocking 87 per cent dip below the ten-year average for third-quarter condo sales.

Zooming out for a bigger picture doesn't look any more inspiring for the market, as new GTHA condo sales are on track for the slowest full year since 1996. Just 3,641 units have been sold in the region during the first three quarters of 2024, marking a 63 per cent drop from Q1-Q3 2023, and representing an even steeper decline of 84 per cent below the same period in 2021.

It's a situation that has experts like Shaun Hildebrand, President of Urbanation, sounding the alarm.

"The new condo market is facing its toughest challenge in decades," said Hildebrand, noting that "Investors are inactive and end-user buyers currently have plenty of lower-priced options to choose from in the resale market."

Hildebrand says that, though it may take some time, "conditions will gradually improve as developers hold back supply, construction inventory continues to drop, and demand rises with declining interest rates."

While sales are approaching historic lows, the number of unsold new condominium units in development actually decreased 4.4 per cent last quarter. 

Granted, this Q3-2024 figure of 23,918 unsold units followed a record high of 25,018 units in the second quarter of this year, though it still marked the greatest quarterly decline of unsold inventory in the last two and a half years.

Though that tidbit may be inspiring on its own, the context here is that experts at Urbanation chalk up this improvement to a lack of new project launches. The report states that just one project with 177 units hit the market last quarter, another sign that the region's prolific building boom may be in serious trouble.

Here's a big sign Toronto's real estate market is in trouble right now despite confident outlookshttps://t.co/RZ1uuFCRmE

— blogTO (@blogTO) October 8, 2024

On a broader scale, new unsold condo inventory actually increased by 16 per cent compared to a year earlier, marking a concerning 56 per cent dip below the latest ten-year average.

As of the close of the quarter, there were 11,629 unsold units in preconstruction, 11,356 units in under-construction projects, and another 933 unsold condo units in completed projects. 

Urbanation states that 76 per cent of unsold inventory is represented by projects that required purchasers to put deposits of at last 20 per cent down. Experts believe that new mortgage rules will "likely have a limited direct impact on new condos, since most buyers were already able to access 30-year amortizations."

As for the future of the market, unsold inventory may soon shatter records, as new condo completions are expected to hit 24,386 units this year, edging out the record-high of 24,114 units recorded last year. 

Over 29,400 units are expected to be completed in the region next year, far outpacing 2024, though this will likely prove the high water mark of the region's years-long building frenzy.