New GTHA Condo Launches Beat Expectations — Sort Of

Fewer newly released Greater Toronto and Hamilton Area pre-construction condos sold this spring, but developers launched as many projects as they did last year.

By Josh Sherman | 2 minute read

Developers in the Greater Toronto and Hamilton Area marched ahead with plans to bring new condo projects to market this spring, matching the number of launches from the same period last year.

Rising interest rates and weakening demand didn’t stop developers in the Greater Toronto and Hamilton Area from launching an unexpectedly high number of condo projects this spring, new research suggests.

This year, developers launched a total of 29 condo projects, excluding townhomes, across the GTHA between the beginning of April and the end of June, according to data that Zonda Urban shared with Wahi. “I thought that there wouldn’t be as many launches as there were,” says Pauline Lierman, vice president of market research at Zonda Urban, a real estate data company. When a condo project is launched, it means the developer has started selling units. Typically, the second quarter is the busiest time of year for developers bringing new product to market. Overall, the launches last quarter encompassed 8,095 condo units. “It’s almost the same [as last year] in terms of what was actually released,” Lierman adds. In the second quarter of 2022, developers also launched 29 projects and a total of 8,147 dwellings. “Where the big difference lies is the absorption rate, though, or the sales,” Lierman explains. Last year, developers sold a combined 66% of condo units launched during the second quarter, whereas this year they were only able to move 48%.

The 13 condo projects with sales above the 48% absorption rate had at least one thing in common, suggests Lierman: “They’re not downtown [Toronto].” The top-selling projects were largely concentrated in the 905 area and included Oakville, Markham, Milton, Burlington, Hamilton, Vaughan, and Mississauga. There was only one above-average Toronto launch, and that project was located in suburban Etobicoke. 

Lierman attributes more sluggish Toronto pre-construction sales at least partly to the higher purchase prices associated with prime, centrally located units. “I think it’s price point right now. You’re talking $1,650 to $1,750 a foot,” says Lierman of Toronto pre-construction pricing. Projects that sold better tended to be priced under $1,200 per foot and may have provided extra incentives, like a parking spot or storage locker, she adds. “There’s latent demand, but it’s very cautious,” says Lierman.

Lierman had initially expected many developers to push planned spring launches back to the fall as the Bank of Canada continued to hike the overnight rate at the beginning of the year, but that wasn’t the case. A couple of strong, early sales performances for projects in Markham likely encouraged developers to stick to their plans. “That kind of was a guide post saying, ‘There’s appetite for launches,’” Lierman says.