Toronto New Home Prices Down More Than 30%, Condo Sales Down 91%

The real estate market in Toronto is undergoing a dramatic shift, as new data reveals significant declines in home prices and sales activity. According to figures from the Building Industry and Land Development Association (BILD), the average price of a new single-family home in Toronto has dropped by more than 30% over the past year. At the same time, new condo sales have plummeted by a staggering 91%, reflecting a sharp cooling in buyer demand across the city.  

BILD reports that the average price of a new single-family home fell to $1.69 million in November 2023, down from $2.42 million the previous year. This category includes detached, semi-detached, and townhomes. Meanwhile, the new condo market is faring even worse, with just 155 units sold in November—a steep drop from over 1,700 units sold during the same month in 2022. The slowdown comes as higher interest rates and economic uncertainty make buyers more cautious.  

Rising borrowing costs are a key factor driving these changes. The Bank of Canada has increased interest rates multiple times over the past year, making mortgages more expensive and dampening buyer enthusiasm. “We’re seeing the effects of affordability challenges in real time,” said Justin Sherwood, a BILD spokesperson. He added that prospective buyers are taking a “wait-and-see” approach, hoping for more price stability before entering the market.  

The slowdown has also impacted the broader construction industry. Fewer new home sales mean developers are hesitant to start new projects, which could lead to delays in building future housing. This is a concern for policymakers, as Toronto already faces a significant housing shortage. Experts warn that while prices are dropping now, a lack of supply in the long term could drive costs back up once demand rebounds.  

While some see the declining prices as a temporary correction, others view it as an opportunity for first-time buyers to enter the market. However, affordability remains a challenge, especially with higher mortgage payments eating into budgets. The reduced sales activity also highlights a shift in buyer priorities, with more people delaying purchases or opting for rentals instead of buying property.  

As Toronto’s housing market adjusts to these new realities, many are watching closely to see what 2024 will bring. Experts predict the market will remain sluggish if interest rates stay high, but they also note that government measures to address affordability and housing supply could play a key role in shaping future trends. For now, both buyers and developers are navigating an uncertain landscape, waiting for clearer signals about where the market is headed.