Greater Toronto real estate’s bad year ended even worse. Altus Group data showed Greater Toronto Area (GTA) developers saw demand slip further in December, as new home buyer incentives failed to stimulate new demand. As a result, the market accumulated the most year-end inventory in nearly a decade—nearly 2.5x the amount available in 2021’s tight market, but that isn’t the banger. Last year the market saw the fewest new home sales since 1990, when Toronto’s last real estate bubble popped.
Toronto New Home Sales Were The Weakest Since 1990
Greater Toronto total annual new home sales per year.
Source: Altus Group.
Greater Toronto developers wrapped up the year with the worst sales in decades. Just 9,816 new homes sold in 2024, down 47.3% from the previous year and 69% below the 10-year average. Sales haven’t been this weak since 1990, a year which previously marked the start of an extended downturn for the region.
Toronto New Home Inventory Sits At Nearly 2.5x 2021’s Tight Market
The lack of sales certainly weren’t due to an inventory shortage in the GTA. Developers had 21,787 homes for sale in December, an increase of 7.5% from a year prior. It’s a massive 144% increase from the notoriously tight market of 2021, with the region last ending a year this well supplied back in 2015.
Will Toronto New Home Prices Require Further Price Drops?
Source: Altus Group.
Greater Toronto new home prices have been relatively resilient in contrast to the weakness. The price of a benchmark, or typical, single-family home fell to $1.55 million in December, down 3.4% from a year prior. However, prices are down 16.5% (-$307,500) from the record high reported in 2022.
Condo prices are moving even slower despite being the weakest market segment. The benchmark condo saw prices fall to $1,018,000 in December, down 2.8% from last year. They’ve come down roughly 18.7% (-$234,300) since hitting a record high, also back in 2022.
Greater Toronto real estate developers are experiencing a once-in-a-generation rut. The market ended the year with the most inventory in nearly a decade, and the weakest sales since the region’s last real estate crash kicked off in 1990—34 years ago. Prices have come down considerably but not much over the past year, especially considering the historic erosion of fundamentals.
A combination of policymakers attempting to undermine market mechanics and the disbelief that prices can fall further is likely behind the lack of movement. Policymakers are throwing hundreds of billions in stimulus and betting the whole economy on housing demand, even against the advice of the central bank. At the same time, the last significant housing downturn was more than 30 years ago. A whole generation has never experienced a large, once-in-a-generation correction.
Obviously, those only happen to the previous generations—not the current one. Every generation never overpays and runs a perfectly efficient market. Until they don’t.