Townhouse and condominium apartment sales in Ontario’s Toronto-Hamilton corridor sank during the first quarter of 2025, spooked by tariff fallout and economic uncertainty.
Sales volume in those categories remained at a multi-decade low in Q1, falling by 50 percent from a year earlier, according to data from Zonda Urban.
There were 733 sales of new condominium apartments in Q1 across the Greater Toronto and Hamilton Area (GTHA), up slightly compared to Q1 2024. But just 441 new townhouses were sold in Q1, a steep 40 percent drop year-over-year.
“The steadier townhouse market pulled back some in the first quarter, which we speculate is in part due to the volatile economic outlook,” said Pauline Lierman, VP of market research at Zonda Urban.
In a news release, Zonda Urban cited “chaotic economic activity, including the tariff situation” as a specific drag on the market for new townhouses. It also said consumer demand has “reversed” since late last year, with Q1 buyers favoring new condo apartments rather than new townhouses as they did in Q4 2024.
Though the Trump administration has changed its tariff policy multiple times over the past few months, in March it enacted a global 25 percent tariff on imported steel and aluminium products. According to the Canadian Home Builders’ Association (CHBA), this could raise the price of processed steel and aluminium products shipped back into Canada for use by Canadian builders.
The CHBA also warned in a statement released April 4 that “the biggest concern for residential construction remains the impact that Trump’s tariffs may have in terms of a global and Canadian recessionary environment, which would in turn negatively affect housing starts. That impact is already being felt with the ongoing uncertainty keeping would-be buyers of new homes and homeowners looking to renovate on the sidelines.”
Lierman echoed the concern that economic jitters are putting a chill on new starts, noting the townhouse and condo segments in the GTHA region showed “little enthusiasm to launch new product” during Q1 of this year. Only 1,145 new condominium apartments began construction in Q1, the slowest start ever recorded by Zonda Urban.
On top of tariff worries and a murky economic outlook, an influx of new build inventory is adding further challenges to the Toronto-Hamilton market.
“The condominium apartment market continues to struggle to restart sales while under pressure to complete a record-breaking number of new units. More apartments – both condominium and rental – began delivering in a six-month period in the GTHA than in any time over the last 30 years at 22,292 units,” said Lierman.
Sales Slow, Prices Drop
As sales continue to stall and new inventory floods onto the market, buyers could find themselves with growing choice and more bargains as prices fall. Unsold standing inventory of condominium apartments in Q1 jumped a whopping 95 percent from Q4 2024, spurring what Lierman called “a willingness to reduce pricing.”
And indeed, 31 developments in the GTHA’s townhouse and apartment sector cut their pricing in Q1, the highest amount ever tracked by Zonda Urban.
The forecast for the region’s market remains cloudy, as Zonda Urban expects sales to remain slow for the rest of the first half of 2025.
