Toronto New Home Sales Hit Record Low, 76 Months of Supply & Counting

Following one of the weakest years on record, Toronto developers just had the worst start to a year ever.BILD GTA and Altus Group data show Greater Toronto new home sales slipped lower in January, making it the weakest on record. The pullback in inventory was met with an even larger drop in sales, leaving the market with an unusually weak demand balance—about 76 months of inventory, if not a single new project is announced. 

Toronto New Home Prices: Single-Family Prices Fall, Condos Rise

Source: Altus Group; BILD GTA.

Greater Toronto’s new home prices were surprisingly mixed. The price of a typical new single-family home fell 0.9% (-$12.4k) to $1.4 million in January, 10.0% (-$155.3k) lower than last year and -26.0% (-$491.4k) from its peak. Prices for the segment are now roughly where they were in early 2021, erasing more than half the gains from 2020 to the 2022 peak.

Condo apartments fared better, rising 0.6% (+$6.3k) to $1.03 million, up 1.2% (+$12.2k) from a year prior. Prices remain roughly 17.6% (-$219.7k) below peak, so the mild gain isn’t quite a turnaround. It’s worth noting a methodology quirk here: The Altus Group’s new home benchmark uses developer asking prices and rarely reflects the concessions used to market new homes.  

Greater Toronto’s new home sales kicked off with the worst start to a new year ever. Altus reported just 269 new home sales in January, 36% lower than last year and 80% below the 10-year average. For context, this is 90.7% lower than the region’s frenzy peak in 2022, when sales were 10x higher. BILD reported this was the worst January on record, with weather certainly not helping the downturn.   

A breakdown by segment pours cold water on the narrative that this is just a condo story. Just 184 single-family homes sold last month, down 26% from last year and 68% below the 10-year average from January. The group didn’t specify if this was a record low, but we couldn’t find a weaker January in at least 20 years.    

Despite higher prices, apparently, the damage isn’t over for condo apartments. Developers sold just 85 new condos in January, down 50% from last year and 89% below the 10-year average. We couldn’t find a weaker January in 25 years, and this is most likely the driver of that record low reported. Weak demand may have also contributed to the price skew, as comparisons become more difficult to properly gauge when there’s only a handful of buyers.

Weak demand in the construction crane capital of the world has led to the rapid buildup of inventory. Total inventory fell to 20,557 new homes for sale in January, down 10.0% from last year—though still the second-most for the month in over 15 years. Despite lower inventory, falling sales make this level even more potent. At this pace, there are 76 months of inventory, indicating a serious oversupply issue. 

While the majority are still condo apartments, single-family housing is rising fast. There were 5,826 single-family units for sale at the end of January, up 27% year over year and roughly 10x the historic lows seen during the 2022 frenzy. That’s likely to add downward pressure for all market segments. 

Weak single-family demand and rising inventory are providing downward pressure on prices. This has been closing the gap between the two, making it the smallest since early 2022. Condo prices may be rising (albeit not much), but as this gap closes, the value proposition of a condo—less space, maintenance fees, construction risks—becomes harder to justify.