According to a report from Sal Guatieri of BMO Financial Group, the number of unsold condo units in Toronto soared to levels not seen in 21 years this January. Guatieri, a Senior Economist at BMO, predicts that the rise in unsold condos, which reached 1,602 units, will slow the increase of new condo prices.
During the same month, condo completions reached a record-breaking 10,368 units, eight times the previous 10-year average. Analysts attribute this surge in completions to construction delays brought on by a record number of multi-family building starts in 2012 (37,406).
The rise in unsold units has many condo experts concerned about risks of market saturation and overbuilding. However, Guatieri suggests that record completions at the beginning of 2015 were the direct result of an unprecedented number of new condo sales in 2011 (28,190). If this demand continues, he says, prices should hold steady and inventory should level out.