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But it's not all good newsHST rebate and bulk buying spark GTHA sales gain but condo supply is plummeting, according to Urbanation report You can save this article by registering for free here. Or sign-in if you have an account.New condominiums rise up as part of a development in the Greater Toronto Area. New data showed that sales rose for recently completed condo units while pre-sales slumped 80 per cent in the second quarter of 2026. Photo by Peter Power /Postmedia NewsNew condominium sales in the Greater Toronto and Hamilton Area posted their first annual increase in nearly three years last quarter –– a rebound driven by buyers snapping up completed units. But pre-construction demand still awaits a revival.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorAccording to condo research firm Urbanation Inc., sales climbed 52 per cent from a year earlier to 702 units in the second quarter, marking the first year-over-year gain since the third quarter of 2023.The increase follows Ontario’s enhanced HST rebate and the federal government’s elimination of GST on qualifying new homes, a measure aimed at improving a condo market that has been grappling with a prolonged downturn.SUBSCRIBER EXCLUSIVE: FP West: Energy Insider brings you behind the oilpatch’s closed doors with exclusive insights from insiders every Wednesday morning.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of FP West: Energy Insider will soon be in your inbox.We encountered an issue signing you up. Please try againThe gains, however, were far from evenly distributed.Nearly all the improvement came from completed projects, where sales tripled to 535 units, helped in part by bulk purchases from investment companies. Pre-construction sales moved in the opposite direction, plunging 80 per cent to just 50 units.“After more than four years of decline, it’s an important signal to see new condo sales respond to the elimination of HST and investor activity,” said Urbanation president Shaun Hildebrand in the report. “That said, this improvement is coming off an extremely low base, and pre-construction demand remains largely dormant.”Several factors put the breaks on new construction, said Robert Kavcic, senior economist at BMO Capital Markets, in a separate report on the housing market Friday. “Residential construction responds to the (recent economic) downturn by pulling back. Presales dry up and projects don’t go ahead or get shelved. Lower resale prices also render new construction relatively uneconomical.”Pricing is a drag on new builds both in relation to resale prices as well as lower revenues from bulk purchases. Completed, unsold new condos were at an average asking price of $1,186 per square foot in the second quarter, roughly 43 per cent above comparable resale units, according to Urbanation. And for the new condo sales that did occur, many were negotiated under asking prices.Hildebrand said in an email that the company tracked seven bulk sales of at least five completed units each that closed in the second quarter, together accounting for 204 sales or 30 per cent of all new condo sales. Those bulk purchases sold for an average of $773 per square foot, roughly seven per cent below the average resale price of $830 per square foot.In BMO’s report, Kavcic said resale prices in some markets have fallen below replacement costs –– the cost of land, construction materials, labour and development charges –– making it increasingly difficult for developers to justify launching new projects.According to the Urbanation report, for the second consecutive quarter there were no new condo project launches. Meanwhile, 1,022 units were cancelled during the period and construction starts fell to just 448 units.The combined pre-construction and under-construction inventory shrank to 48,710 units in the second quarter, down 37 per cent from a year earlier and 62 per cent from a high of about 127,000 units in 2022.Even if the bulk sales were excluded, there would have been 498 sales in the second quarter, Hildebrand said, which would have represented an eight per cent year-over-year increase, suggesting the HST rebate helped boost demand beyond large institutional transactions. Still, he said, “with virtually no new units being added to the pipeline, condo supply is set to see its largest ever decline in the coming years.” Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.