Pre-construction sales across the Greater Toronto Area (GTA) have fallen to levels not seen since the 2008 financial crisis, sparking warnings that the city’s housing landscape could be permanently reshaped.
According to RBC assistant chief economist Robert Hogue, the slowdown isn’t just another cycle. Investor appetite — the fuel that has long powered Toronto’s condo pre-sales — has “largely evaporated,” driven by rising costs, higher mortgage rates, and fading expectations of rapid appreciation.
Condo Inventory Hits a Nine-Year High
- Unsold condo units under construction are at their highest level in nearly a decade.
- Owners renewing mortgages at higher rates are increasingly pressured to list their properties, adding to the glut.
- Developers, facing soft demand and soaring costs, are hitting pause on new projects.
With so much supply on the market, Hogue estimates condo inventory would need to shrink by at least 25% before pre-construction demand begins to recover.
From Frenzied Buyers to a True Buyer’s Market
Remember the pandemic “FOMO” rush? Buyers were lining up for anything with four walls. Today, it’s a completely different story.
- Only 118 new condos sold in the GTA in August — down nearly 60% from last year and 90% below the 10-year average (Altus Group).
- Buyers now prefer resale condos, which are often priced below what developers can viably offer.
- The result: a rare buyer’s market, where purchasers can negotiate hard and shop around.
This shift has drastically altered Toronto’s competitive landscape. Developers can’t compete with existing inventory, and investors are stepping away as rental demand cools and profit margins evaporate.
Industry Pleas for Help
The Building Industry and Land Development Association (BILD) is sounding alarms, urging government intervention. Their recommendations include suspending the GST on homes under $1 million.
But economists like Hogue warn these moves would only provide a “marginal” boost, not the unlock the market truly needs. The bigger challenge? A disconnect between what buyers are willing to pay and what developers need to charge given today’s high land, labour, and construction costs.
What Comes Next for Toronto Condos?
RBC predicts pre-construction sales could start to recover gradually in 2026, with momentum building into 2027. But risks loom:
- A weaker economy could keep buyers sidelined.
- More condo listings could push inventory even higher.
- Developers may lose skilled workers during the downturn, creating bottlenecks once demand returns.
What This Means for Buyers, Investors, and Developers
For buyers, this could be the best opportunity in years to negotiate condo prices. For investors and developers, however, the freeze is squeezing cash flow and raising long-term risks.
At Lendworth Canada, we help borrowers and investors adapt to these market shifts with first and second mortgages, construction financing, and private lending solutions designed for today’s uncertain real estate environment.
✅ Bottom Line: Toronto’s condo deep freeze is real — and it’s reshaping the city’s housing market. While buyers gain negotiating power, developers and investors face a long road to recovery.
📍 Visit us at 10-8750 Jane Street, Vaughan, ON L4K 2M9
📞 Call: (905) 761-9900
📧 Email: info@lendworth.ca