A quiet shift is happening in Canada’s housing market
The Greater Toronto and Hamilton Area’s (GTHA) multi-family housing market experienced a downturn in the first half of 2025, with sales of townhouses and condominium apartments plummeting by 67% year-over-year. This sharp decline positions the GTHA as the slowest major multi-family market, trailing behind its Canadian counterparts, Calgary and Metro Vancouver.
According to Zonda Urban’s Q2-2025 GTHA report, only 1,817 multi-family units were sold in the first six months of the year, comprising 952 new condominium apartments and 865 townhouses. The second quarter alone saw 778 units sold, representing a 25% drop from the first quarter of 2025.
“The dire reports on the state of the new condominium apartment market are accurate. The industry is at an inflection point; grappling with constructive ways to pull itself out of a now three-year downturn,” stated Pauline Lierman, Zonda Urban’s vice president, market research.
New condominium apartment sales have consistently fallen for the past three quarters, reaching a market low of 354 units in Q2-2025. This marks a 78% decrease from a year ago and a precipitous 96% plunge from the market peak in Q2-2021, when 8,622 new condominium apartments were sold.
While townhouse activity began to show signs of recovery late in the second quarter, with launches resuming in late May, sales were still down. The 424 townhouse sales in Q2-2025 represented a 45% year-over-year decline, though it was only a 4% decrease from the first quarter.
Inventory mounts, prices see reductions
The market is also contending with a rise in unsold built inventory, which reached 1,198 units in newer buildings during Zonda Urban’s Q2 survey. The shift to rental properties has been observed in some instances, with over 7,100 units tracked as moved to rental tenure since September 2024. However, as Lierman noted, “that is not an option for everyone, nor does it address issues with multi-decade highs in deliveries and mounting unsold built inventory.”
To combat stagnant sales, some developers are resorting to price reductions. “More sites are willing to address the fundamental issue of price with 52 apartment and townhouse developments reducing their asking prices since the start of 2025,” Lierman explained, adding that there has been “some limited response to this so far, especially where parking is also included in the purchase price.”
In Q2-2025, four new condominium apartment projects launched, selling 18% of their 953 units at an average of $992/sq ft, or approximately $681,829 for a 701-sq-ft unit. Thirteen new townhouse projects launched, with 53% of 374 released units sold at an average end price of $867,305, or $580/sq ft for a 1,742-sq-ft unit.
Future supply concerns emerge
Despite the current market challenges, deliveries of new condominium apartments soared in the first half of 2025, with 15,060 units beginning occupancy. An additional 31,257 units are expected to begin occupancy by the end of 2025. However, the long-term outlook for supply beyond 2026 is concerning.
Estimated occupancies are projected to fall significantly to 20,506 units across 50 projects in 2028, with only 13 of these sites currently under construction. By 2029, expected occupancies are anticipated to plummet further to 4,599 units, none of which are presently under construction, signalling a potential “freefall in supply.”
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