For the first time in 30 years, no new condominium projects were launched in the Greater Toronto Hamilton Area in the first quarter, as the market downturned deeper and sales fell to a new 35-year low.

Market analytics firm Urbanation Inc. said in a new report that just 246 new condos were sold in the first three months of 2026, down 52 per cent from a year earlier and 94 per cent below the 10-year average for the period.

The slowdown has now stretched into its fifth year, and it’s affecting how industry players operate their businesses. Alexander Yolevski, an agent with Remax Condos Plus Corp., considers himself a pre-construction specialist, but said his business has shifted from about 95 per cent pre-con to almost entirely resale and rental transactions today.

“Even last year, the only projects that were being announced were ultra-ultra-luxury or boutique-style condos,” he told Real Estate Magazine.

“These projects were launching at $2,000 per square foot and higher, which is crazy that those were the only ones to have any kind of success — and not to say that they were, it was still slow.”

 

Sales stall as buyers retreat

 

Even as sales at newly completed projects rose 17 per cent year-over-year to a four-year high of 148 units, unsold inventory continued to climb.

Urbanation reported a record 4,295 completed but unsold condos at the end of Q1 — more than double the level a year ago and nearly five times higher than two years earlier. Based on the pace of sales over the past year, that represents 92 months of supply.

Another 8,629 unsold units are currently under construction and expected to be completed over the next several years.

Developers have responded by lowering asking prices for standing inventory to an average of $1,189 per square foot, down five per cent from a year ago and 13 per cent below the peak three years ago.

Still, resale units in comparable buildings have dropped faster, averaging $859 per square foot in Q1 — a 25 per cent decline from the market peak in early 2022.

That has pushed the gap between new and resale pricing to a record 38 per cent.

“Builders are not going to be able to build and sell a new condo at $900 per square foot,” Yolevski said.

He added that some smaller units have already seen sharp corrections, with certain studio apartments falling back to 2017-era pricing, in the $300,000 range.

“No builder is going to jump into the game, launch a brand new project. It just doesn’t make sense. They’ll wait for a better day.”

 

Pipeline shifts as developers pull back

 

With demand subdued, developers are slowing new construction and, in some cases, exiting projects altogether.

A total of 1,254 units started construction in Q1, a six-quarter high driven largely by a single project. At the same time, 963 units were cancelled, all of which are being converted to purpose-built rental, said Urbanation.

Since the start of 2024, more than 11,400 condo units have been cancelled, resulting in a net removal of 7,360 units after some were converted to rental housing.

While completions remain elevated, they are beginning to decline. A total of 7,201 units were completed in Q1, down 21 per cent from a year earlier. Full-year completions are projected to fall to 21,850 units in 2026, down from nearly 30,000 units in each of the previous two years, with further declines expected through 2028.

New policy measures, including a temporary full HST rebate in Ontario and reduced development charges, could help move existing unsold units, said Yolevski. Offloading existing completed inventory will have to happen before launching new projects becomes feasible. 

Yolevski said the incentives are giving developers a reason to push harder on selling completed inventory, using them as a marketing tool and often layering on additional discounts. 

“Builders hate holding onto units that are done, but not sold,” he said.

“This whole thing about HST rebates and development charges being cut in half gives people a lot of incentive to come out and have a look at them and hopefully help the builders sell these.”

Even so, he said the traditional pre-construction investor has largely disappeared, except for buyers with cash targeting distressed opportunities.

“The pre-con investor is gone, unless it’s someone with cash picking up a desperate sale.”

 

Courtney Zwicker is a digital reporter and associate editor for REM. Based in Atlantic Canada, she has over a decade of experience covering daily business news.