As Ontario’s government readies legislation aimed at boosting the delivery of new privately owned housing supply, the most prolific buyers for new-build homes – condominium investors – are heading for the sidelines.

The latest data from real estate analysts Urbanation Inc., points out there’s only been two times in recent decades when sales of preconstruction condominiums in the Greater Toronto Area (GTA) fell lower than they did in the third quarter of 2022: the financial crisis of 2009 and the first quarter of the COVID-19 pandemic in 2020. Urbanation records 1,748 sales, a drop of 79 per cent from the third quarter of 2021 (8,320 sales). Overall, the quarter was down 32 per cent from the 10-year average.

"Ontario has set a goal of delivering 1.5 million new homes in the next 10 years, a figure that would take a three-fold increase in completions over the 55,909 homes the CMHC says Ontario delivered in 2021."

“This is one of the issues of relying on condos to be the main driving force of housing supply in your region: You can only build at the pace investors will buy,” said Shaun Hildebrand, president of Urbanation. “When we talk about housing supply, this is the exact wrong time to be seeing a slowdown in development. We should be ramping up.”

The extent to which Ontario relies on condominium apartments to fuel new housing supply is stark: According to the Canada Mortgage and Housing Corporation (CMHC), so far in 2022 there have been 22,737 new home completions in the GTA, of that three quarters (15,582) were apartments (a small chunk of that number are purpose-built rental apartments). In some markets as much as half of the newly completed condo apartments are pushed into the rental pool, making condos a key source of new housing for first-time buyers and tenants alike.

Ontario has set a goal of delivering 1.5 million new homes in the next 10 years, a figure that would take a three-fold increase in completions over the 55,909 homes the CMHC says Ontario delivered in 2021 (two thirds of which came from the condo-dominated GTA).



Pauline Lierman, vice-president of market research with Zonda Urban, counts a slightly better sales period with perhaps 2,891 transactions, which is still 61-per-cent down compared to previous quarters. That said, she sees worrying signs in the rate at which sales were happening. When a condominium project launches, the rate at which the units for sale fly off the shelves is called the absorption rate. That rate had averaged about 75 per cent in a quarter in recent years. While 2022 started off strong, Zonda’s figures show things have deteriorated quickly.

“We’ve seen about three consecutive quarters of declining sales: In Q1 it was about 80 per cent absorbed, but Q2 we saw a faltering absorption rate and it had fallen to 62 per cent,” Ms. Lierman said. “For Q3 three [developers] launched about 4,391 units – about half of what we saw over the last two quarters – and the absorption rate was just 40 per cent.”

Concerns about high prices for future units coupled with shocking rises in interest rates seem to be the driving factors depressing sales. Both Urbanation and Zonda saw strength in sales in the Hamilton and Brampton areas where the price per square foot for new condos can be less than $1,200, compared to Toronto-adjacent suburbs that see prices as more like as $1,400. That said, sales in core Toronto and midtown stayed relatively stable despite being the highest priced units available.

The slowdown in demand for future units is somewhat at odds with what’s happening in the construction market right now. Ms. Lierman said Zonda’s data shows there’s about 120,400 housing units under construction right now – about 104,000 in condominiums and another 16,000 in purpose-built rental. Both figures are well above historical norms: “It does speak to builders revving up, that’s far higher than it was 20 years ago,” she said. Mr. Hildebrand agrees, and recalls it wasn’t long ago that barely 50,000 units would be under construction in a given year.

It can take up to five years for preconstruction condos sold today to be completed, but for a province facing an acute housing shortage the current slowdown amounts to a chokepoint that could undermine its goals for housing delivery in the future.





The growth of renter households outpaced the growth of owner households in 2021, according to the latest Canadian Housing Survey from Statistics Canada. In addition to sharing data from the 2021 Census, the new report includes housing tenure trends of the past decade and looks at the change in housing affordability since the onset of the pandemic. Highlights from the report include:

  • The proportion of Canadian households that own their home—or the homeownership rate (66.5% in 2021)—is on the decline after peaking in 2011 (69.0%). The growth in renter households (+21.5%) is more than double the growth in owner households (+8.4%).
  • Adults under the age of 75 were less likely to own their home in 2021 compared to adults in that age range a decade earlier—especially young millennials aged 25 to 29 years (36.5% in 2021 vs. 44.1% in 2011).
  • Newly built dwellings are increasingly likely to be occupied by renters—40.4 per cent of the housing built in the last five years were tenant-occupied.
  • Over one-third of recently built dwellings (those constructed between 2011 and 2021) were occupied and primarily maintained by millennial (36.6%) renters or owners in 2021, the largest share of any generation. Millennials also represented the largest share of condominium occupants (30.2%) compared with the other generations.
  • While condominium construction continues to surge, the majority of these buildings (90%) are located in Canada’s largest cities. Condominiums made up 39.9 per cent of the occupied stock in the primary downtowns in 2021, and half of these downtown condo units were being rented out by investors.

The Canadian Housing Survey also noted the significant rise in home values in both large and small municipalities in Ontario and British Columbia between 2016 to 2021;  77.8 per cent in Ontario and 46.1 per cent in British Columbia saw the average expected value of their homes rise by over 50 per cent.

Differences in the impact of temporary COVID-19 benefits on household incomes were a key contributor to the different degrees of improvement in housing affordability seen for renters and home owners from 2016 to 2021. The rate of unaffordable housing, or the proportion of households that spent 30 per cent or more of their income on shelter costs, fell from 24.1 per cent in 2016 to 20.9 per cent in 2021. The rate of unaffordable housing in Canada for renters fell from 40.0 per cent in 2016 to 33.2 per cent in 2021, with most of the decline occurring among renters earning below the median household income of all renters (68.4% in 2016, compared with 56.0% in 2021).

Unaffordable housing rates were highest in downtowns, where the percentage of renters spending more than 30 per cent of their income on shelter costs in 2021 was above the national average.

Almost 1.5 million Canadian households lived in “core housing need” in 2021, defined as living in an unsuitable, inadequate or unaffordable dwelling and not able to afford alternative housing in their community. The core housing need rate fell from 12.7 per cent in 2016 to 10.1 percent in 2021.

In 2021, 10.0 million households in Canada owned their home, which is more than at any point in the country’s history. However, while the number continues to grow, Canadians overall were less likely to own their home in 2021 (66.5%) than they were a decade earlier, when a record high (69.0%) were homeowners.






Employment rose by 108,000 (+0.6%) in October, recouping losses observed from May to September. The unemployment rate held steady at 5.2% in October.  Employment rose in several industries, led by manufacturing, construction, and accommodation and food services. At the same time, it fell in wholesale and retail trade, as well as in natural resources.

The number of private-sector employees rose for the first time since March 2022. Employment was little changed among employees in the public sector and among self-employed workers.  Employment increased among both men and women in the core working ages of 25 to 54 in October. It was little changed among men and women aged 15 to 24 and those aged 55 and older. Employment rose in six provinces, with gains concentrated in Ontario and Quebec.

Year-over-year growth in the average hourly wages of employees remained above 5% for a fifth consecutive month in October, rising 5.6% (+$1.68 to $31.94) compared with October 2021 (not seasonally adjusted).  After declining 0.6% in September, total hours worked increased 0.7% in October. Compared with October 2021, total hours worked were up 2.2%.

In October, nearly two-thirds (64.3%) of employees with wages above $40.00 per hour had received a raise in the previous year, compared with half (50.1%) of those with wages of $20.00 or less per hour (population aged 15 to 69; not seasonally adjusted).

More than one in three (35.3%) Canadians aged 15 and older lived in households citing difficulty meeting financial needs in October, up from one in five in October 2020 (not seasonally adjusted).

More than 1.7 million Canadians had hybrid work arrangements in October (population aged 15 to 69; not seasonally adjusted).


51 OWEN STREET - PENETANGUISHENE - $4,475,000 / $149,170 Per Suite / 3.68% Cap Rate

This is a single concrete rental apartment building dating from the 1950's north of Barrie.  The building has a masonry exterior, flat roof, single glazed windows and balconies.  There is surface parking only.  Rents are 100% below market with many seniors in the building and long term tenants.  There is a storage locker room on the main floor and laundry room as well.  The 30 suite building is electrically heated with the landlord paying for all of the cost.  The building has rental upside, potential to add suites and potential to sub meter the hydro.  The building also needed cap ex include roof, windows, balconies and parking.  The asset was fully marketed and purchased by a private out of town investor.

20 ELIZABETH STREET NORTH - MISSISSAUGA –  $19,100,000 /  $280,100 Per Suite / 2.61% Cap Rate

This sale is of a 10 storey concrete rental apartment building sitting on 0.5 acres of land.  The building comprises of 68 suites and has on site laundry and surface and underground parking.   There is a brick exterior, double windows, flat roof, balconies and elevators.  The building is heated with a hot water gas fired radiant system.  Rents in the building are far below market.   The building was not exposed to the market and was purchase by Pulis Real Estate.

475-477 LANCASTER STREET WEST - KITCHENER - $16,560,000 / $285,500 Per Suite / 3.50% Cap Rate

This property comprises two rental walk up frame apartment buildings with a total of 58 suites.  Both buildings are 4 stories and the lot is around 2.1 acres in size.  The buildings have a brick and siding exterior, double windows, balconies and flat roofs. Most of the suite have renovated by there still is some rental upside in the project.  Suites are gas fired heated and tenants pay all utilities.  The asset was fully marketed and exposed and was purchased by Co-operative housing group.

112-116 EMMA AVENUE -CORNWALL - $2,400,000 / $150,000 Per Suite / 3.50% Cap Rate

This property comprises two buildings each two storey and each containing 8 self contained rental apartment suites.  These are frame walk up buildings with brick exterior and flat roofs with double windows and no balconies (rear deck).  The buildings date from the 1960's and are well maintained and managed properly over the years.  The building is always full and has on site laundry.  Many suites have been renovated but there still exists rental upside.  The site is large at 0.68 acres and addition density is a potential here.  The property was fully marketed and sold to a private investor.



Together the team has completed over 1,500 transactions and has sold over $7.0 billion in apartments and development land. Put us to work for you and see the results. NO ONE has sold more buildings than our group. Experience, knowledge and professionalism will insure you get the right deal or the highest price if you are selling.

The Apartment Group is a dedicated team of professionals specializing in the sale of multi-residential investment properties. With over 40 years of combined experience, the team brings together their strengths including strong negotiation and sales skills along with highly technical market analysis and appraisal methods.

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