The number of new condos sold in the Greater Toronto Area so far this year is at its lowest level in a decade, with just under 10,000 units purchased since the beginning of 2023, according to a new report.

The results of Urbanation’s Q3-2023 Condominium Market Survey show that 9,568 units have been sold in the GTA year-to-date, down 47 per cent from the same period in 2022.

The report noted that while there were 2,664 new units sold in the third quarter of this year, up by more than 40 per cent compared to the number reported in the third quarter of 2022, it attributes last year’s slump to “rapidly” rising interest rates that caused presale activity to grind to a halt. Urbanation said 2023 still mark the second lowest third quarter sales total in the past 20 years.

“New condo sales have been impacted by fewer new project launches. A total of 2,491 units launched for presale in Q3-2023, down 23 per cent annually,” the report read.

“Year-to-date presale launches totaling 13,197 units fell 36 per cent annually.”

Urbanation said 40 projects totalling 13,721 units had an expected launch date in 2023 but now “remain on the shelf,” according to its analysis.

The report found that 1,798 new condominiums began construction in the GTA during the third quarter of 2023, down 86 per cent from the same period last year and representing a 10-year low for third quarter construction, the report noted.

Prices for new condos are also on the decline, according to Urbanation.

Urbanation said unit prices for projects launched for presale in the third quarter of 2023 average $1,216 per square foot, dropping 18 per cent from the record high average of $1,485 one year ago.

The report notes that buyers and developers focused more of their activity on “lower priced locations mainly in the 905 region,” which represented more than half of the total sales for the third quarter of 2023.

Urbanation surveys the GTA condo market each quarter through its relationships with developers, brokerages, and lenders.

“As presale activity typically impacts construction starts with a 12-18 month lag, the slowdown in new condo sales that began in the second half of 2022 is expected to continue weighing on construction starts in the coming quarters,” Urbanation said.

In a statement accompanying the report, Shaun Hildebrand, the president of Urbanation, said elevated interest rates and “heightened market uncertainty” continue to negatively impact the new condo sector in the Toronto area.

The Bank of Canada has raised its key lending rate to a 20-year high of five per cent, significantly inflating the cost of borrowing and bringing a chill to the real estate market in the process.

“While some new launches with competitive price points have seen success, many projects have been unable to make an economic case for proceeding in the current market, causing more supply to be put on hold,” Hildebrand said.