Toronto’s condo market is likely to recover “slowly,” a new report by Urbanation shows, after it saw new sales hit a 35-year low even as buyers are starting to come back from the sidelines.
The report, released Thursday, showed that in the first quarter of 2026, just 246 new condos were sold in the Greater Toronto Hamilton Area, a 52-per cent drop compared to a year prior.
In addition, the report showed there were no new launches of condo products during the quarter for the first time in at least 30 years.
“With market confidence still very fragile and demand fundamentals slowing down, the recovery process is likely to begin slowly,” said Shaun Hildebrand from Urbanation in a statement.
Approximately 4,295 new condos were completed and unsold as of the first quarter, doubling the level from a year ago, the report showed. Another 8,629 unsold new condos are under construction and set for completion in the next few years.
“Based on sales during the previous 12 months, there was 92 months of completed new condo supply on the market, which doesn’t fully account for units that were presold but the buyer failed to close,” the report notes.
That supply could be a benefit to buyers who are starting to return to the market, but the Toronto Regional Real Estate Board said with fewer starts on new projects, the number of condos could shrink, leading to a lack of supply.
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Jason Mercer, chief information officer at the TRREB, said condo buyers will benefit from the “substantial amount of choice.”
“That could actually be a draw, seeing more people sort of moving into that marketplace that have been on the sidelines over the last year or two,” he said.
“As you start to see those sales pick up, (it) will absorb that standing inventory and I think certainly as we move into 2027, market conditions will be tighter and that’ll probably provide some support for prices.”
The report by Urbanation showed about 14,649 condo units are scheduled for completion, bringing the total for 2026 to 21,850 — down from about 29,600 last year. It’s expected that completed new condo units will continue to drop to about 14,659 next year and just about 13,000 in 2028.
Those selling now won’t see that help just yet, with Mercer noting investors who put their money into pre-builds are having to rent out their properties.
If one type of condo sale has benefits over the other, Victor Tran with Rates.ca says those in the resale market have a much better shot of selling than investors.
This is because those condos may have a more established board and face a lower chance of a substantial condo fee increase as time goes on.
“Units that have been around for a little while, resale properties .. That’s definitely a bit more attractive than a new construction,” Tran said.
“There’s just so much information out there nowadays and they are learning that there’s a lot of risks tied to purchasing a new build.”
But Tran said even if resales have a better opportunity, it’s still difficult to time the market or say for sure when the recovery will begin.
He said there has been some increase among buyers looking to enter the market, but there isn’t an urgency to do so among others.
“There’s still a lot of people that are interested in entering the market and they want to own something and have something of their own, but a lot of people that want to buy tend to get discouraged after realizing the true cost of owning,” Tran said.
Even with there still being unknowns surrounding the market, Tran said a recovery is unlikely in 2026 and it could still take a “couple of years” for things to fully recover.
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