Toronto Condo Market Faces Unprecedented Downturn with Zero New Completions Expected by 2029
The Greater Toronto Hamilton Area (GTHA) is experiencing what analysts are calling the worst condominium market correction in its history, with projections showing virtually no new condo deliveries by the end of this decade. According to a comprehensive report from Urbanation Inc., a firm that has been analyzing the market since 1981, the situation represents a severe supply crisis with far-reaching implications for housing affordability in Canada's largest metropolitan region.
Historic Decline in New Condo Sales
New condominium sales in the GTHA plummeted by a staggering 60 percent in 2025, reaching just 1,599 units. This marks the lowest sales volume since 1991 and represents the fourth consecutive year of decline. Since 2021, new condo sales have collapsed by an astonishing 95 percent, indicating a market in deep distress.
The cancellation of condo projects reached record levels in 2025, with 28 new developments being scrapped. This number more than doubled the cancellations from 2024 and exceeded the previous high recorded in 2018. While eight of these cancelled projects were converted to purpose-built rental housing, this shift was insufficient to offset the dramatic decline in new condo construction starts.
Construction Starts Plunge to Decade-Low Levels
Over the past three years, new condo construction starts have plunged by 88 percent, bringing the total inventory currently under construction to its lowest point in ten years. This sharp reduction in new development activity has created what Urbanation president Shaun Hildebrand describes as "a significant cause for concern as it relates to future supply."
"As the condo market enters the fifth year of its largest ever correction, the duration of this downturn should be a significant cause for concern," Hildebrand stated. "By the end of the decade, we know with certainty that there won't be any new condo completions. What we don't know is how far into the 2030s the supply crunch will last."
Investor Exodus and Pre-Sale Collapse
Developers launched only ten new condo projects in 2025, offering just 1,425 units. Of these, a mere 22 percent were pre-sold, representing a severe decline from the 81 percent pre-sale rate achieved in 2022. This collapse in pre-construction sales reflects a fundamental shift in market dynamics.
Investors who traditionally drove pre-construction sales have largely abandoned the market, deterred by soaring construction costs and shrinking demand that have rendered many projects financially unfeasible. This investor exodus has created a challenging environment for developers seeking to launch new projects.
Current Market Conditions and Price Dynamics
The market currently faces a glut of inventory as declining sales coincide with a wave of completions over the past two years. In 2025 alone, 29,291 condo units were completed, nearly matching the record high set the previous year. Despite this oversupply, pricing dynamics remain complex.
The average selling price for a new condo has declined by 18 percent since 2022, falling to $1,123 per square foot. However, this still represents a significant premium compared to resale condos, which average $856 per square foot. This price disparity persists even as the market struggles with excess inventory.
Projected Supply Crunch Through the 2030s
Urbanation forecasts that condo completions will fall by 25 percent in 2026, with further declines expected in 2027. The firm's analysis concludes that "by 2029, virtually no new condos are expected to be delivered" in the Toronto market.
This projected supply shortage raises serious questions about housing affordability in the region. "If rental construction can't fill the void, this raises serious questions around the impact on affordability," Hildebrand warned. The potential extended supply crunch could have profound implications for Toronto's housing market well into the next decade.
The condo market correction comes as broader economic factors show some improvement. While inflation was a major concern during the pandemic, with shelter costs identified as a primary driver, recent data shows Canada's inflation rate has cooled to around target levels. According to Shelly Kaushik, senior economist at BMO Capital Markets, this cooling has been driven by "three high-profile components" that have been gradually declining.
