The bloodbath

The developer struggling to finish a 340-unit condo development in Surrey was blunt with a reporter this week.

“We’ve lost the investor-buyer, new first-time buyers,” he said. “The condominium market is absolutely dead right now. I can’t paint that in a good picture. And it’s not just me, it’s everybody.”

And then this: “If we think it’s bad here, it’s a bloodbath in Toronto.”

Yup, quelle mess. Builders in Van moan about a 2,000 glut of unsold units. In the GTA, an historic 22,000+ condos sit available, unsold, unloved and – at current market prices – utterly unsaleable. If the central bank flames out on a second rate cut at the end of October (as expected) the developer gloom deepens.

Real estate consultancy Urbanation yesterday dropped its Q3 condo report. Brutal. Blood everywhere. Here are highlights (please have children leave the room).

• Total condo sales in a region of six million people in the course of three months: 319
• Drop in sales from a year ago: 54%
• Decline in sales from the latest 10-year average: 92%
• Projects cancelled since start if 2024: 32
• Number of units in cancelled projects: 6,981
• Additional projects on sold due to insufficient sales: 20
• Unsold inventory available: 22,602
• Drop in asking prices over two years: 9.6%
• Decline in current construction activity year/year: 77%
• Number of years since this level was experienced: 28

What are we to make of this?

And down she goes. GTA’s condo crash.

First, the government’s housing-start goals from the Lower Mainland to the Golden Horseshoe will never be met. It’s impossible. Even with some improved numbers in September, the country is building half the homes that politicians are spending billions encouraging.

Second, there is no price collapse. A drop of less than 10% in the cost of new units is nothing. At $1,200 a foot, a liveable 700-foot one-bedder still costs $840,000. Meanwhile in the GTA, resale units are listed for an average of 28% less. And there are 16,000 of those currently for sale in the metro region.

Third. It’s getting worse. The local unemployment rate is ugly. The car business is writhing. Trades are losing gigs as projects get shelved. Mortgage rates have stalled. It’s almost November. Buyer sentiment sucks. Immigration levels and foreign students have faded. Rents are falling. Condo investors have disappeared. Lenders have pulled in their horns.

So, when does the worm turn?

Over the 120 days we have to get through a critical federal budget. There will be three Bank of Canada rate decision days to digest. That trade agreement with the States will be in negotiation, with the fate of tariffs hanging. And Dog knows what the orange guy will do as our biggest trading partner is immersed in a government shutdown, divisive mass deportation efforts, historic political polarization, presidential retribution and whatever the heck the deal is with Venezuela. Oh yeah, and there’s Bad Bunny at the Super Bowl.

In short, with new builds as with resales, it’s a buyer’s market. Prices will likely continue to melt. Sales levels will be tepid. And governments will do all they can to prime the pump once again.

By the way, did you hear that in order to afford the rent on an average one-bedder in 416 a person needs to earn $44 an hour? But the minimum wage is $17.60.

So it takes an income of $86,000 to pay rent. Almost 40,000 new and resale apartments are for sale. Barely 300 sold in the last three months. More than 60% of landlords are in negative cash flow. And the feds just committed $13 billion to more real estate.

This is not ending well.

About the picture: “Here are Goose, Ramona, and Nash,” writes John on Ontario. “Three pandemic pups and pals frim Oshawa,  waiting patiently for their post walk treats.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/10/17/the-bloodbath-2/