Higher interest rates, lengthy approval times, and construction delays are just some of the reasons for the slowdown, according to an Urbanation report.
Developers are expected to delay building 10,000 new condominium units as preconstruction sales plunge amid interest rate hikes.
“As developers grapple with quickly rising construction costs, labour shortages, large increases to development charges, higher interest rates, and lengthy approval timelines, there appears to be little, if any, room for new condo prices to adjust lower in the current environment,” the report says. The number of unsold new condominiums in the market rose by 36 per cent from the 18-quarter low in the first quarter of 2022, but it declined by six per cent annually and remained 20 per cent below the 10-year average.
“The new condominium market is likely to continue slowing in the near-term from last year’s record highs as presale buyers act cautiously and developers delay new openings, with a focus on finishing projects already underway,” Shaun Hildebrand, president of Urbanation, said in the report.
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