The state of the new condo market: Challenges, opportunities, and what comes next


March 21, 2025
The Greater Toronto Area (GTA) new condo market is undergoing a period of recalibration. Investors, end-users and developers are navigating shifting market conditions, including declining pre-construction sales, long-term supply constraints and subdued short-term rental growth projections. While some view this as a market correction, others see a strategic buying opportunity.
GTA new condo sales have slowed significantly, with approximately 5,000 units sold in 2024. Bullpen Research & Consulting projects a modest improvement in 2025, forecasting an increase to 6,300 units.
Opportunity in market cycles
Christopher Wein of Equiton, a veteran GTA condo developer, emphasises the need to distinguish between short-term speculators and long-term investors. “People who are in it for the long haul and understand market cycles see this as an opportunity,” Wein says.
Higher borrowing costs have made mortgage qualification more challenging, prompting some pre-construction buyers to explore alternative financing options. Many are considering contract assignments, co-signing arrangements, or even private lending to close their purchases. “People need to understand the potential legal repercussions of failing to close on their units,” says Daniel Vyner of DV Capital in another recent report. While developers have historically shown flexibility, firms such as CentreCourt now place greater emphasis on buyer qualification upfront to mitigate legal risks. There are some very strong deals to be had if a someone is willing to purchase an assignment.
Today’s slowdown in pre-construction sales will have far-reaching consequences in the coming years. Lenders typically require at least 70 per cent of a project’s units to be sold before construction can commence. With many developments struggling to meet this threshold, fewer construction starts are anticipated. In 2024, new condo starts fell to less than 9,300 units – the lowest level since 2002 – while completions reached a record high of nearly 30,000 units. However, this level of completions is unlikely to persist. By 2028, new condo completions are expected to decline sharply to approximately 9,500 units.
Essential infrastructure
Another major factor influencing the market is foreign investment policy. While government restrictions have limited foreign buyer activity in recent years, developers argue that immigration and international capital remain critical to financing and delivering new housing. In this context, housing is increasingly viewed as essential infrastructure rather than merely a commodity.
Despite current conditions, many prospective buyers remain hesitant, waiting for further price corrections or interest rate reductions. However, some industry leaders are pushing back against this approach. Mattamy Homes, for instance, has launched a national public relations campaign to shift sentiment away from market timing and toward the long-term benefits of homeownership. The company’s messaging underscores that as mortgage rates decline, demand will increase, pushing prices higher. Buyers who act now could benefit from equity appreciation and more favourable pricing before the market tightens.
Long-term fundamentals
White the GTA condo market is in transition, the long-term fundamentals suggest that current conditions may present an attractive entry point. A slowdown in supply today means fewer new units will be available in the coming years, and rising rental demand is expected to support stronger price growth over time. For those willing to take a long-term perspective, today’s market offers a rare opportunity to invest ahead of the next upswing. However, buyers should conduct thorough due diligence, as pricing strategies vary across projects – some developers have maintained peak pricing, while others have adjusted closer to resale levels. Surround yourself with an experienced team and do your homework. Good luck.
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