New condo sales climb 50% in Toronto and Hamilton, but pipeline keeps shrinking

New condominium apartment sales in the Greater Toronto and Hamilton Area (GTHA) climbed 52 per cent year over year in the second quarter, marking the market’s first annual increase since the third quarter of 2023.

The gain was fuelled by completed projects and bulk purchases by investors following the elimination of HST on new homes, according to the Q2 2026 Condominium Market Survey results released Monday by Urbanation Inc., a condominium and apartment market intelligence firm.

Despite the rebound, sales remained 86 per cent below the 10-year average for the period.

Shaun Hildebrand, president of Urbanation, said the increase is an encouraging sign, but cautions that a supply drought is pending. There were no new project launches for a second consecutive quarter, while another 1,022 units were cancelled, bringing the total number of cancelled units since the beginning of 2024 to 11,653. Construction starts also dropped to just 448 units.

“After more than four years of decline, it’s an important signal to see new condo sales respond to the elimination of HST and investor activity,” said Hildebrand.

“That said, this improvement is coming off an extremely low base, and pre-construction demand remains largely dormant. With virtually no new units being added to the pipeline, condo supply is set to see its largest ever decline in the coming years.”

Completed projects account for nearly all sales

A total of 702 new condominium apartments sold during the quarter, with nearly all of the increase coming from completed projects. Sales of completed units more than tripled year over year to 535 units, including several large bulk purchases by investment groups.

Condo bulk buying is gaining traction as Toronto’s struggling condo market has a glut of inventory that developers are looking to unload.

Pre-construction activity moved in the opposite direction, dropping 80 per cent annually to just 50 units.

Urbanation said the structure of Ontario’s enhanced HST rebate may have contributed to the slowdown. Under the program, projects must begin construction before March 31, 2027, and be substantially completed by Dec. 31, 2029, for buyers to qualify. Final program rules were not confirmed until June, leaving uncertainty for purchasers considering pre-construction units.

Developers negotiate as prices hold steady

As developers awaited clarity on the rebate, asking prices for completed but unsold new condominiums edged down two per cent from a year earlier to an average of $1,186 per square foot.

That remained a 43 per cent premium over the average resale price of $830 per square foot for condominium projects registered within the past three years.

Urbanation said many of the sales completed during the quarter closed below asking prices as developers became more aggressive in negotiating after the HST announcement. Some bulk transactions were completed at prices below comparable resale units.

Combined standing inventory of new and resale condominiums totalled 12,106 units at the end of the quarter, up just one per cent from a year earlier, the report said. At the same time, active resale listings fell 21 per cent to a three-year low of 7,105 units.

The report also challenged the perception that the market is flooded with small investor-owned units, saying the decline in resale listings has been broad-based across unit sizes.

Supply pipeline continues to shrink

While the report pointed to early signs of stabilization, it warned the market’s future supply outlook is becoming increasingly constrained.

Combined pre-construction and under-construction inventory fell 37 per cent from a year earlier to 48,710 units, down 62 per cent from a peak of roughly 127,000 units in 2022.

Urbanation said the rapidly shrinking development pipeline points toward a market that could become “substantially undersupplied” within the next few years if current trends continue.

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