GTA Condo Market Faces Unprecedented Surplus Amid Sluggish Sales
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The Greater Toronto Area (GTA) is facing an unprecedented condo surplus, with nearly 40,000 units in various stages of availability, including unsold units in development, resale listings, and assignments. This supply level is unlike anything the market has encountered before and could take over four years to absorb at the current sales rate. Typically, it would take 14 to 16 months to clear such inventory, but with new condo sales hitting a nearly 30-year low, absorption is progressing much slower than usual.
The condo market slowdown began in the latter half of 2022, causing a buildup in unsold inventory. Despite developers delaying many launches, about 35,000 units have still come to market since mid-2022, while only 22,000 sold over that period. This oversupply has driven a 58% increase in unsold inventory in the past two years. Additionally, condo completions reached record highs in 2023 and are projected to set new records in 2024 and 2025, further contributing to the market saturation.
Investors seeking to offload units have also driven up resale and assignment listings, with resale inventory alone growing by 92% over the past two years. While there is some optimism for sales improvement with potential interest rate cuts and a cautious approach from developers, it will likely take time for the market to balance. Some projects may convert to rental properties or be canceled, which could ease the supply issue gradually next year.
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