Housing supply needs mean more condos, benefiting renters and investors alike

Resales often dominate conversations about housing markets, while transactions of newly built housing, especially condominiums, do not receive the same attention despite transactions of new or pre-built condominiums constituting a sizable chunk of residential transactions.

For example, 21,782 new condominiums were sold in 2022 in the Greater Toronto Area (GTA) alone, even though last year’s slowdown in housing demand hit sales, which were down 30 per cent from 2021, according to a report by Urbanation Inc., a market researcher specializing in condominium, rental and land markets.

Nevertheless, the new condo market is maintaining a balance between supply and demand such that unsold inventory in the fourth quarter last year was about 15,000 units, which is in line with the 15-year average.

The resale market, of course, influences new condo sales. But the market downturn hit the resale condo market more in 2022, with condo resales in the GTA dropping by 36 per cent to 19,105 units, a record eight-year low in transaction volume. Resale prices averaged around $847 per square foot (psf) in the fourth quarter. Even with the decline in sales, the 2022 price of $1,427 psf for new condos was higher than in 2021.