Toronto's new home market has plummeted to one of its weakest periods in years, even as developers offer significant incentives. Despite prices dropping over 30% since their peak and interest rates easing, buyers are largely staying away. The downturn is particularly acute in the condominium segment, where sales have fallen by over 91% compared to the 10-year average.

Declining Prices Across the Board

New home prices in Greater Toronto continue to decline, erasing years of gains. In October, the benchmark price for a single-family home fell by 1.0% (or $15,600) to $1.55 million. This marks a 4.9% year-over-year decrease, translating to a $79,800 drop, and a staggering 32.6% ($751,000) decline from the 2022 record high. Prices have now reverted to 2021 levels, effectively rolling back three years of growth.

Condominium prices, traditionally more stable, are now falling at an accelerated rate. The benchmark price for a new condo dropped 1.8% ($18,900) in October to $1.0 million. While this represents a modest year-over-year decline of 1.6%, the overall drop from the 2022 peak is significant at 32.5% ($483,700), bringing prices to their lowest since 2020.

Sales Hit Rock Bottom

Behind the plunging prices is a sharp decline in demand. October saw just 765 new home sales, a 60% drop compared to last year and 77% below the 10-year average. Single-family homes, with prices out of reach for many buyers, saw only 555 units sold—similar to last year's weak figures and 45% below the 10-year average.

The situation is even more dire for condo apartments, with just 210 units sold in October. This marks an 84% year-over-year drop and a staggering 91% decline compared to the 10-year average. Notably, even during half of those years, new home sales were not particularly robust.

Concluding Summary

Despite slight improvements in existing home sales, Toronto's new home market remains muted. Single-family homes have long struggled due to unaffordable prices, even during periods of record-low interest rates. Condos, once a reliable segment powered by investors, are now grappling with falling prices and declining rental yields. With investors stepping back and affordability challenges persisting, the market shows little sign of recovery, underscoring significant shifts in Toronto's housing landscape.

2024 Interest Rate Updates Next Bank Of Canada
Meeting Date Is December 11

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