Condo inventory remains high in Toronto area cities but there are marked differences in the prices per square foot based on the desirability of the unit-type, a new report found.

Bullpen Research & Consulting has issued a new report to help people better understand what developers are doing with completed and unsold condominium inventory in the Greater Toronto and Hamilton Area (GTHA).

“It's certainly fascinating to see what's happening in the marketplace, and how developers are pivoting and trying to make money or preserve money in today's market,” Bullpen president and owner Ben Myers told RENX.

Fewer developer-owned condos on MLS than expected

Myers was surprised that, while real estate research firm Zonda Urban reports there are 2,358 unsold units of developer-owned and completed condo inventory available in the GTHA, there were just slightly more than 200 developer-owned units listed on MLS — and those were what the report was based on.

Myers believes the discrepancy may be due to some developers being reluctant to post information on public forums because they don’t want to reveal price drops or want to keep their product separate from the retail market.

Rental listings accounted for 37 per cent of the completed new condo standing inventory in the GTHA from January to May. The average unit was 707 square feet, with 0.4 parking spaces, 1.6 bathrooms and an average asking rent of $2,850 per month, or $4.03 per square foot.

Resale listings represented 63 per cent of the MLS sample. The average listing was 936 square feet, with 0.8 parking spaces, two bathrooms, an average list price of $1.04 million and an average asking price of $1,112 per square foot.

Unit size and inventory

The resale inventory was more heavily weighted toward larger formats than the rental inventory. Two-bedroom, two-bedroom plus den, three-bedroom and three-bedroom plus den units accounted for 42 per cent of the total sample.

“It’s certainly not surprising that the units they're putting up for rent tend to be smaller, and they're keeping some of the more prime, larger units listed on the resale market,” said Myers. 

While it’s been widely repeated throughout the industry that people want larger units to live in, as opposed to the smaller ones that were popular with investors during the condo boom period earlier in the decade, Myers said the reason there are still a fair number available for resale is based on price.

Two-bedroom plus den units were offered at $1,138 per square foot and three-bedroom units at $1,348 per square foot, compared to just $923 per square foot for one-bedroom plus den units.

“There's always a claim that people want family-sized units, and larger units are what people demand, but the pricing hasn’t come down significantly on those units,” said Myers.

Conversely, the number of unsold micro-units in the less desirable sub-400-square-foot range was smaller than might have been expected. 

“Those typically sold in these projects when they launched and came to market in 2021 and early 2022, and even in 2020 when the market was very strong,” explained Myers. “Investors ate up all the small units, so not many developers have those units remaining when the building is complete.”

Asking prices have dropped

Overall asking prices were effectively flat at just under $1,290 per square foot from 2021 to 2024 before declining to $1,176 in 2025 and $1,112 in the first part of this year. The largest peak-to-2026 per-square-foot price declines were concentrated in the smaller and mid-sized categories.

“I was surprised at how long it took for many developers to lower their prices even though the market was clearly soft and doing very little transactions,” said Myers. 

“But it seems, over the last year-and-a-half, developers have come to the realization that we're not going back to peak pricing and that they should probably forget that the period from June of 2020 to March of 2022 ever existed.”

The recently announced harmonized sales tax rebate for new construction homes priced up to $1 million, which is scheduled to run until March 1, 2027, may have some developers looking to take advantage of the window by pricing product competitively to sell it and hopefully enable them to move on to the next project.

The seeming lack of urgency in lowering prices from mid-2022 to 2024 can likely also be attributed to developers offering other purchase incentives that weren’t directly related to price.

Myers expects pricing to remain relatively flat for the next nine to 15 months until the number of completions of condos currently under construction starts to drop off. Prices should then start to rise due to a lack of available product arising from the dearth of new condo starts.

Companies buying condo units in bulk

Myers is supportive of companies including Jesta Group and High Art Capital purchasing bulk condo portfolios so developers can clear out inventory, pay off debt and contemplate new projects. 

“It just shows that people believe in the long-term fundamentals of Toronto, that they think there's a strong rental market here, and they think that growth is going to be strong in the future,” he said.

“I think we're still in a position of under-supplying the marketplace, so if these groups are actually acquiring units at below cost — which seems to be their strategy — then I think it's a good strategy.”

Myers expects these companies to have a hold period of about five years, when it’s hoped the condo market will have made a recovery, since he sees their strategy as being more focused on capital appreciation than building long-term cash-flow.