Slowdown in HRM market is now imminent :
" Toronto’s preconstruction condo market worsened in the second quarter, with sales sliding to their lowest level in three decades, developers cancelling projects and buyers struggling to close on new purchases.
There were 502 sales of new condos in the Toronto and Hamilton area in the quarter that ended June 30, according to a report released Tuesday by industry research firm Urbanation Inc. That was down 10 per cent from the first quarter of this year and marked the lowest activity since 1993.
The lack of buyers for new condos has led some developers to delay or cancel planned projects because they typically need to sell at least 70 per cent of a project to qualify for construction financing.
“The market has gone from bad to terrible,” Urbanation president Shaun Hildebrand said in an interview.
Across the Toronto and Hamilton region, according to Urbanation, 21 developments amounting to 4,412 condo units have been cancelled over the past year-and-a-half, which is the highest level since 2018. Four projects were cancelled over the past three months, including projects from developers Diamond Kilmer Developments and 95 Developments.
Developers had already postponed or shelved numerous projects since the country’s real estate market started slowing in 2022. In the past quarter, only three projects with a total of 891 units were launched, according to Urbanation. That is 86 per cent lower than the 10-year average for the second quarter.
Investors, who used to account for at least 70 per cent of the preconstruction condo sales, are no longer interested given that many of their purchases are now money-losing investments.
Buyers have been having a hard time closing on their purchases because their properties are worth less than what they agreed to pay in earlier years.
When a buyer is due to close, lenders typically only provide a mortgage based on the current value, not the price that the buyer agreed to pay. Because appraisals are coming in 10 per cent to 30 per cent below a condo’s original selling price, the buyer has to come up with the difference.
That may be contributing to a record number of 2,478 condo units that were completed and being marketed for sale as of the second quarter, according to the report. That is double the amount from last year and five times higher than two years ago.
Mr. Hildebrand said that number is likely conservative, as some buyers are still in the process of trying to close.
“I would say that there’s many more units that the developers have on their books that they aren’t necessarily making available for purchase right now because they’re still trying to get the buyers to close,” he said.
https://www.theglobeandmail.com/business...ondos-continues-to-crater-as-sales-drop/ July 16 2025
Prev
Linear Mode
