Fifty-five per cent of Toronto preconstruction condominium units in Toronto went unsold in the first quarter of 2025, according to the Canada Mortgage and Housing Corporation (CMHC).

The figure is just below the record high of 56% reported at year-end 2024.

CMHC said the high level of unsold inventory is making it increasingly difficult for developers to obtain financing, as lenders typically require at least 70% of units to be presold before releasing funds.

The federal agency also reported that months of inventory for preconstruction condos have reached a record high. At the current pace of sales, it would take 58 months to sell the existing supply—more than 14 times longer than in 2022.

Overall, condominium sales in the Toronto area have dropped by 75% since mid-2022, while resale prices have declined 13.4%, CMHC said. Project cancellations have surged, with the number of cancelled units in 2024 five times higher than in 2022.

Toronto project investors are facing mounting challenges as well. CMHC noted that those who purchased preconstruction units in 2024 could face capital losses of up to 6%, while rising carrying costs and modest rent increases are further squeezing profitability.

CMHC expects the market to remain weak in the near term as new completions stay near record highs and demand continues to lag. The agency warned that ongoing cancellations and reduced construction activity could worsen the long-term housing supply shortage.

Pictured: The Teargarden North condominium project while it was under construction in 2022

Photo: Shutterstock