Developers have started slashing the prices of new units

Toronto’s spiralling condo market has forced developers to lower prices in an attempt to clear ballooning inventory, according to a new report from Urbanation. Sales in the city recently hit a 35-year low, and no new projects were launched in 2026’s first quarter. Worse still, a mere 246 condos sold between January and March, down 52 per cent annually and exceedingly below the 10-year average of 4,046.

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It’s a tough picture. Condo supply here continues to stack up as sales dwindle. For instance, a record 4,295 units were completed this past quarter but not sold. And another 8,629 new units are currently under construction, the vast majority of them also unsold.

In response, developers lowered their prices by five per cent year over year, to an average of $1,189 per square foot. New condos, in particular, are having trouble competing with the more affordable resale market. Older units, meanwhile, are selling at an average of $859 per square foot, 25 per cent lower than in 2022, when prices peaked.

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In March, all three levels of government agreed on an $8.8-billion deal to make new condos more attractive to first-time buyers by removing the HST from their sales, shaving off an average of $100,000 from asking prices. But, even with those savings, there is still a 20 per cent gap between the prices of resale properties and new inventory.

“After the condo market sank to a multi-decade low in the first quarter, it was encouraging to see a number of new initiatives announced that should help improve sales, reduce inventory and get more construction underway,” said Urbanation president Shaun Hildebrand. “However, with market confidence still very fragile and demand fundamentals slowing down, the recovery process is likely to begin slowly.”