If you’ve been reading recent headlines about Toronto’s housing market, you’ve probably seen terms such as “glut,” “oversupply” and “plunge.” Media reports have focused heavily on unsold inventory in the Greater Toronto Area’s (GTA) new housing market, creating the impression that there’s too much product and not enough demand. But the reality is more nuanced – and for informed buyers, it might just be a window of opportunity.

Important clarification

Let’s start with an important clarification: A large portion of what’s considered “unsold” doesn’t physically exist yet. Much of it is pre-construction. Developers often release floorplans and pricing years before shovels hit the ground, aiming to hit a sales threshold – typically 70 per cent – before they can secure financing and start building. If they don’t reach their targets, they may delay or cancel the project entirely. So, while a project might show hundreds of “unsold” units, that doesn’t mean hundreds of finished homes are sitting empty. It means they haven’t started construction and may never proceed unless the economics improve.

That brings us to the current opportunity. Right now, there are more units available than in recent years, and sales activity is subdued. As a result, buyers have more leverage than usual. Developers are more open to incentives, extended deposit structures, and even some minor price flexibility. This is what we mean when we say it’s a buyer’s market. The balance of power has shifted – at least temporarily.

But that won’t last forever.

Opportunity to negotiate

Why? Because developers don’t have infinite patience or funding. If units don’t sell, they often get rented out. In fact, many completed buildings in the GTA with slow absorption are now leasing units directly to tenants. Developers with deep pockets and in-house property management teams are happy to generate cash flow and wait until market conditions improve. Once those units are rented, they effectively leave the inventory pool – and the opportunity to negotiate disappears.

This strategy is becoming more common. A decade ago, I conducted a survey of GTA developers that showed that nearly a quarter would consider renting out unsold inventory before dropping prices. Only 12 per cent said they’d reduce prices outright. Conditions are worse than in 2015, but the results are worth considering anyways. Unlike individual sellers in the resale market, developers have specific cost structures. They can’t just lower prices dramatically and absorb the loss. Land was acquired at peak values, and costs for construction, labour, fees and financing were calculated during the era of near-zero interest rates. Even with some cost moderation recently, the margin for many projects has been cut dramatically, limiting room for discounting.

It’s also important to remember that much of the “decline” in rental prices being reported doesn’t reflect widespread weakness. Rental rates for the smallest units – particularly micro one bedrooms or studios – have softened. But for larger, more generously sized homes, pricing remains stable or even slightly higher in some cases. From 2021 to 2023, rents in many GTA submarkets increased by more than 30 percent. A recent five-per-cent dip needs to be viewed in that broader context. We’re seeing a market that’s recalibrating – not collapsing. Some developers are happy to rent the units out, as they’re not impacted by media headlines aimed at generating clicks, not informing buyers and tenants.

Despite the short-term listings bump, new housing supply remains heavily constrained over the long term. Even with today’s record completion levels, strong population growth and limited ground-oriented development continue to place upward pressure on prices. Data from Canada Mortgage and Housing Corp. data shows that new condominium projects are still completing at very high absorption rates, with more than 99 per cent of inventory sold on average in the 12 months ending May 2025.

Unique window

It’s also worth noting that unsold inventory isn’t evenly spread across the region. A small number of projects – and developers – account for most of the available supply. Large, well-capitalized firms are content to wait. Many have already shifted to rental strategies, and their units are being leased – not left empty.

So, what should buyers take from all this?

If you’re in the market for a new home, you currently have rare negotiating power. More supply, slower sales and a quiet summer market mean you can shop around, compare incentives and find value. But the clock is ticking. Developers are already converting unsold units to rentals, and if interest rates drop further, immigration levels jump or employment increases, you’ll see demand return quickly. When that happens, today’s options may no longer be available – or affordable.

In short, this is a unique window for well-informed buyers. Yes, there is inventory. Yes, some of it is negotiable. But no, the market isn’t collapsing. The best deals will go quietly, to those paying attention. So do your research, surround yourself with an experienced team and good luck.