A jump in new condominiums built in Toronto was no match for the torrid pace of demand last year.

New data released Tuesday by market research firm Urbanation showed new condo sales in the Greater Toronto Area totaled 30,844 units in 2021, an eye-popping 69 per cent increase from 2020. It's a number that narrowly missed the previous all-time sales record of 31,216 units in 2017.

The report also showed the market capped off the year on a strong note with fourth-quarter sales up 77 per cent year-over-year with 8,361 condos sold – a new record for the three-month period.

The number of new condos that came onto the market in 2021 was the third-highest ever at 26,835 units, but that was still outpaced by demand. Urbanation said unsold inventory dropped to its lowest in more than a year. 

“Even with a large increase in new condo project launches in 2021, demand continued to outpace supply, leaving the market with exceptionally low inventory and surging prices heading in 2022. With resale supply also scare, expect competitive market conditions to sustain in the near term,” Shaun Hildebrand, president of Urbanation, said in a release.

Some economists and other market watchers believe the key to improving housing affordability in hot markets such as Toronto is by increasing the supply of homes. However, rising borrowing costs could slow demand in the coming years. 

“By the second half [of] the year, interest rate increases, record condo completions, and policy changes that likely target investors should lead to more moderate levels of presale activity,” Hildebrand said.

With market conditions continuing to tighten, the average price per square foot for a new condo in the fourth quarter jumped 18 per cent annually to $1,322, led by price growth in the suburbs surrounding Toronto, according to the data.