Toronto condo prices are dropping fast as sales continue to crash

The downfall of the Toronto area housing market is showing no sign of stopping as sales numbers and prices, specifically for new condos, continue to spiral to new lows.

Gone are the days when seemingly everyone was vying for their own piece of coveted real estate in the region — in fact, hardly anyone seems to think it a wise financial decision anymore, not even the investors who used to snap up pre-construction condos for what was once a guaranteed profit through renting or resale down the road.

The most recent numbers from industry leaders show sales of new units were a whopping 81 per cent lower last month than at the same time last year, which is especially concerning given that we were already in somewhat of a slump at that time.

Compared to the 10-year average for new condo sales, September 2024’s numbers — courtesy of the Building Industry and Land Development Association (BILD) — have fallen an incredible 85 per cent, while new home sales in general are down a similarly remarkable 58 per cent from the same benchmark. And quarterly, things are looking just as dismal.

Meanwhile, September also marked one of the sharpest month-over-month decreases ever seen for the average selling price of a condo, either new or resale, in the GTA, going from $667,700 in August to $654,300 the following month.

The Toronto Regional Real Estate Board (TRREB), trying to keep the outlook positive, has positioned yet another month of price declines and the poor state of the market in general as providing buyers more options and a better ability to negotiate in a city that has been vastly overpriced for years.

But, even lower prices haven’t seemed to chip away at brutal unaffordability of housing in the region, especially in the present economy.

The vast majority of investors are now losing money on units purchased here, disincentivizing any from further entering the market and stalling new builds — builds that developers are struggling to cover in the first place amid what they are calling a crisis of exorbitant property, material, labour and tax costs.

As those stakeholders put off tens of thousands of planned units, the city also has an opposite, and perhaps larger problem: the record number of existing condos sitting unsold on the market, and for longer.

With the full effect of recent interest rate cuts (and further cuts themselves) to come, people seem to have vastly different outlooks on what the near future of the property market in the city holds, and when and to what extent it will rebound as residents reconsider the value in home ownership.