To say that the 2023 market was brutal for the Toronto housing market is an understatement. The last time the multi-family market in the Greater Toronto and Hamilton Area (GTHA) experienced such a difficult year was in 2003.
According to exclusive data from Zonda Urban, the 12-month pace of condominium apartment and townhouse sales was 60 per cent lower than the 37,104 sales recorded for the recent peak in Q1-2022, representing a 36 per cent decrease in annual sales to 14,947 from a year earlier. Transactions of condominium apartments took the brunt of the downturn, falling 44 per cent from 2022 to 11,692 sales. Townhouse demand increased in 2023, up 38 per cent from the previous year to 3,255 units.
Multi-family sales volume for the third and fourth quarters amounted to 6,181, down 12 per cent from 2022 and 29 per cent from the first half of 2023 (8,766), when the market saw some recovery in March and April on the back of expectations that interest rates had levelled off. Although the total volume of units launched during the fourth quarter increased, the second half of the year saw a 14 per cent decline in condominium launch activity, reflecting the weakening of market circumstances that coincided with the trends of 2022.
2,701 or 29 per cent of the 9,215 condominium apartment units introduced to the market in the second half of 2023 were sold in the first quarter of their introduction, as opposed to 51 per cent for launches in the second half of 2022. Only three of the 19 condominium apartment developments that debuted in the fourth quarter were able to sell at least half of their total number of units.
Canopy Towers 2 – Tower B and The Hill Residences were two projects that were introduced; however, not long after they opened, they were mainly shelved (Zonda Urban acknowledges that some small, unverified transactions happened in both). According to Zonda Urban, these projects should reappear on the market in 2024 with redesigns and possibly new prices.
Townhouse demand outpaced that of condominium apartments, with newly released units increasing 338 percent in the second half of 2023 compared to the previous year and 322 percent in the first quarter after debut.
The ability to be quick and adaptable explained the difference in the 2023 market response between new condominium apartments and new townhouse product; townhouse developers started readjusting in late 2022 with price reductions and a concentration on smaller, more affordable units.
By 2023’s fourth quarter, the average end-selling townhouse price had decreased by 5 per cent year-over-year, or $55,000 per unit, with an average unit size of 126 square feet less. Although developers of new condominiums are reconsidering the composition of their suites, most market adjustments have taken the shape of strong incentives and wagering on areas beyond Toronto’s central centre that provide more alluring price points.
