New condo apartment sales in the Greater Toronto Hamilton Area (GTHA) increased 52 per cent annually to 702 units in Q2-2026. According to the latest research from Urbanation, this marks the first year-over-year gain since Q3-2023, as the elimination of HST and bulk investor buying helped pull the market up from its 35-year lows.

On the other hand, sales were 86 per cent below the latest 10-year average for Q2 periods. In addition to ongoing market uncertainty, buyers have remained hesitant as the final rules of Ontario’s HST rebate weren’t confirmed until June.

“After more than four years of decline, it’s an important signal to see new condo sales respond to the elimination of HST and investor activity,” said Shaun Hildebrand, president of Urbanation. “That said, this improvement is coming off an extremely low base, and pre-construction demand remains largely dormant. With virtually no new units being added to the pipeline, condo supply is set to see its largest ever decline in the coming years.”

Nearly all the gain in new condo sales activity last quarter came from completed projects. Sales more than tripled from a year ago to 535 units, which included some large bulk sales to investment groups. Pre-construction sales moved in the opposite direction, dropping 80 per cent annually to just 50 units. This reflected, at least in part, how the HST rebate is structured as it requires construction to start before March 31, 2027, and be substantially completed by December 31, 2029, creating a real risk that pre-construction buyers won’t qualify.

There was little change in Q2 asking prices for completed and unsold new condos, which decreased 2 per cent annually to an average of $1,186 per square foot (psf). This represented a record-wide 43 per cent premium over average resale prices of $830 psf in new projects registered within the past three years.

However, for the new condo sales that did occur in Q2, prices were generally well below asking. Some developers became more aggressive in lowering asking prices and negotiating selling prices following the HST announcement, with bulk deals transacting at prices even below resale.

Condo inventory

Combined standing new and resale condo inventory in the GTHA totaled 12,106 units at the end of Q2, up only 1 per cent from a year ago, the slowest pace of growth in three years. Completed, developer-held inventory rose from 4,826 units in Q1 to a record-high 5,001 units in Q2, 68% higher than a year ago. This was offset by a 21 per cent year-over-year drop in active resale listings to a three-year low of 7,105 units — still 48 per cent above the 10-year average, but the largest annual decline in four-and-a-half years. Combined months of supply across completed new and resale condos eased to 7.3, down from a high of 8.5 a year earlier and marking the first meaningful improvement in this measure since the current downturn began.

In the resale market, smaller units are being absorbed rather than piling up. Units under 600 square feet accounted for 20.4 per cent of active resale listings in Q2, down from a high of 24.3 per cent in 2024 and only modestly above the 19.6 per cent share recorded in 2020.

The breakdown of completed and unsold new condo inventory follows a very similar distribution by unit size as resale units, with 22 per cent of units under 600 square feet as of Q2. Most standing developer-held inventory (54 per cent) is more than 700 square feet, with 57 per cent of units in two-bedroom or larger layouts and an overall average unit size of 836 square feet.

Undersupplied market

Early signs of stabilization are emerging as the outlook for future supply grows more concerning. The new condo supply pipeline continued to shrink sharply, with combined pre-construction and under-construction inventory falling to 48,710 units in Q2 — down 37 per cent from a year earlier and a 62 per cent plunge from the high of about 127,000 units in 2022.

The pipeline is quickly thinning. There have been no new project launches for a second consecutive quarter and an additional 1,022 units cancelled in Q2, which bring the running total since the start of 2024 to 11,653 units. Construction starts are down to just 448 units.