The Toronto condo market has had an unseasonably slow second quarter, with sales down nearly 20 per cent compared to the same time last year and inventory levels continuing to rise.

The Q2 condo market report by the Toronto Regional Real Estate Board (TRREB) reported that there were just 5,474 condo sales in April, May and June of 2024, down 19.8 per cent from the 6,824 sales across the same months in 2023. That was paired with massive growth in new listings; they were up 36.5 per cent year-over-year, hitting 16,917.

It’s a trend that the city is seeing across all segments of the condo market; a recent report on new condo sales in the GTHA showed a 66 per cent year-over-year decline in sales in Q2 of 2024 and unsold inventory climbing to a record high 25,893 units, equal to 34 months of supply.

Still, the excess supply in the city hasn’t done much to push down prices — the average GTA condo selling price in Q2 was $729,005, down just 1.2 per cent year-over-year, and in the city of Toronto,  the average selling price was $765,963, only a 0.5 per cent decline. 

“This suggests that sellers are holding relatively firm on their listing prices. This may be in anticipation of improved market conditions as borrowing costs continue to trend lower this year and next,” said TRREB chief market analyst Jason Mercer.

The Bank of Canada announced its first rate cut in four years in June, a nominal decrease of 25 basis points to 4.75 per cent. This week, an additional rate cut of 25 basis points was announced, and experts are predicting at least two more before the end of 2024.

TRREB president Jennifer Pearce credits the drop in sales to interest rates, noting that the condo market is particularly sensitive to it as many first-time buyers use this segment as an entryway into homeownership. “With monthly payments remaining high and average rents edging lower over the past year, many would-be buyers remain on the sidelines. However, over the next year, an improving affordability picture will see a growing number of first-time buyers enter the condo market,” she stated. 

Condo developer Brad Lamb previously told Streets of Toronto the condo market will be slower to recover than the low-rise market, predicting, “I’d say things will be quite strong next spring, and it will take two years before we get back to where we were in early 2021, assuming that the rate is going to fall a couple of points between now and next June.”