High Borrowing Costs And Record Condo Completions Lead To Oversupply In Greater Toronto: Td Economist Report

Real estate experts say the Greater Toronto Area (GTA) is experiencing a condo oversupply caused by high interest rates and an increase in new condo units. According to a report by TD economist Rishi Sondhi, the surge in new condos and high borrowing costs are making it harder for buyers to purchase, leading to a 25% drop in condo resales compared to pre-pandemic levels.

Sondhi’s report highlights that there were around 19,000 new condo completions in the GTA from January to July this year, up significantly from previous years. This increased supply, combined with high interest rates, is creating a challenging market for both investors and buyers.

Active condo listings in the GTA soared by 63.9% in July compared to last year, reaching 8,879 units. The City of Toronto saw a similar rise, with a 61.5% increase in active listings. This trend is mirrored in other Canadian cities like Vancouver, Montreal, and Calgary, where active condo listings have also risen.

With higher interest rates making it costly to hold onto investment properties, many investors are finding it less profitable to keep condos. This has led to a more competitive market and declining condo prices.