The price of a new condominium in the Greater Toronto Area (GTA) has fallen for the first time in a decade, according to a report from Ubranation Inc.

The average price of a new condo in the region fell 2.2 per cent year-over-year to $1,411 per square foot, the figures revealed. This marks the first annual price drop in 10 years for new condos, the report said.

There were also fewer buyers interested in purchasing a new condo, it revealed.

New condo sales in the GTA fell 35 per cent on an annual basis to 4,610 units sold, and reached a decade low of 28 per cent below the average second-quarter figures, the report detailed.

On a quarterly basis, new condo sales did jump 118 per cent, however, the data revealed sales for the first half of this year were down 59 per cent compared to the first half of 2022.

As for bringing more housing supply online, developers launched 27 presale projects in the second quarter of 2023 with a total of 7,349 units, however this marked a 27 per cent decline from the same period last year, the report revealed. While there were fewer presale units constructed in Q2 of 2023, the figures were in line with the 10-year average of 7,276 units, the data showed.

The softness is being attributed to buyers being hesitant to enter the market following of the Bank of Canada’s latest round of rate increases. 

Buyers showed the most interest in the GTA, where lower priced projects in the 905 region reached a record high portion of sales at 60 per cent, while new condo sales in the city of Toronto hit a record low of 14 per cent, the report said.

“As the population expands at a record pace, the GTA’s 12-month running total for new condo sales has dropped to its lowest level since 2009,” Shuan Hildebrand, president of Urbanation, said in a press release.

Demand for lower priced projects is being reflected in the average sold price of new launches, which fell to a seven-quarter low at $1,236 per-square-foot, according to the data. That figure is down eight per cent annually and 13 per cent lower than the average of $1,426 per-square-foot of projects launched in the first quarter of last year.

Despite the price drop, condo sales remain under pressure, the report said.  

"This will soon begin to impact construction and eventually cause serious supply shortages in a few years, the extent of which will depend on how long the current slowdown in presale activity persists,” he said.