Toronto's market for new homes still stuck in 'abnormal' winter slump

by Sergey Korostensky

Buyers remain on the sidelines and developers, too, are waiting to launch projects, leading a possible supply crunch down the road, says homebuilders' association.

housing — There were 578 newly built homes sold in the GTA last month — falling 68 per cent below the 10-year average, but down just three per cent from last year, according to the Building Industry and Land Development Association.

While Toronto's home resale market has begun to heat up, buyers eyeing newly built homes are still holding their breath for the Bank of Canada to lower interest rates this spring, according to a new report from the Building Industry and Land Development Association.

And a drop in pre-market condominium sales in January could signal a looming lack of supply once the market regains speed, says Justin Sherwood, BILD’s senior vice-president of communications and stakeholder relations.

"It is actually going to make the crunch worse down the road," he said. "I think it's going to get painful, because as buyers return to the markets, there'll be less supply out there."

There were 578 newly built homes sold in the GTA last month — falling 68 per cent below the 10-year average, but down just three per cent from last year.

New single family homes, 345 of which were sold in January, made up the majority of sales. This marked an 92 per cent increase from January 2023, which saw a 10-year low.

Just 233 new condominiums were sold in the GTA last month, a 44 per cent decrease from the same month in 2023. Both new condominiums and single family home sales fell far below the 10-year average, by 60 per cent and 78 per cent respectively.

"It's pretty much more of the same" of the winter market slump that began in the fall, said Sherwood, who noted the situation is unlikely to change until buyers see an indication that the Bank of Canada will lower its key rate.

He noted that inventory is holding at a consistent rate, with 19,829 total remaining new units. Of the existing new units, however, there are few completed new condominiums available: only 599 units, compared to 6,162 under construction and 9,916 pre-construction.