Bulk buyers accounted for 45% of new Toronto condo sales during third quarter, report says

Skip to Content News Archives Economy Defence Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Defence Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Defence Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomeReal EstateBulk buyers accounted for 45% of new Toronto condo sales during third quarter, report saysOverall sales doubled from a year earlier but remain far below the 10-year average, Urbanation report findsLast updated 18 minutes ago Investment groups are snapping up newly built condos in the Greater Toronto and Hamilton Area. Photo by Peter J Thompson/National Post filesInvestment groups are snapping up newly built condos in the Greater Toronto and Hamilton Area at discounts averaging 40 per cent, as developers struggling to clear unsold inventory increasingly turn to bulk sales to move units.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountA new report from condo research firm Urbanation Inc. found that investment groups purchased 339 units in bulk transactions during the third quarter, accounting for 45 per cent of new condo sales. Overall sales doubled from a year earlier to 760 units, although activity remained 78 per cent below the 10-year third-quarter average.This advertisement has not loaded yet, but your article continues below.The investment groups paid an average of $763 per square foot, compared with original selling prices that were largely set during the market peak in 2021 and 2022, according to Shaun Hildebrand, president of Urbanation.SUBSCRIBER EXCLUSIVE: FP West: Energy Insider brings you behind the oilpatch’s closed doors with exclusive insights from insiders every Wednesday morning.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of FP West: Energy Insider will soon be in your inbox.We encountered an issue signing you up. Please try againIn an email, Hildebrand said resale condo prices have since fallen nearly 30 per cent, helping explain the size of the discounts. Bulk buyers paid about 12 per cent less than the $866 per square foot averaged by resale units in recently registered buildings.Hildebrand said the buyers are private real estate investment firms and funds acquiring completed condos to operate as long-term rentals. He pointed to two publicly announced initiatives: High Art Capital’s provincially backed program targeting approximately 2,200 rental homes, and Jesta Group’s $500-million program targeting more than 1,000 units.“The developers are between a rock and a hard place,” said John Pasalis, president of Toronto-based Realosophy Realty.Pasalis said developers must continue paying condo fees and financing costs on completed units that remain unsold, even as prices have fallen.This advertisement has not loaded yet, but your article continues below.“It costs them to wait for buyers,” he said.Asked whether individual buyers could negotiate the same discounts as investment groups purchasing dozens of units, Pasalis said it was “probably unlikely.”“I think it’s one of the things that makes the market a little bit unfair to end users today,” he said.Completed and unsold inventory fell seven per cent to 5,127 units in the third quarter, the first quarterly decline in four years.However, inventory remained 40 per cent higher than a year ago and four times the level recorded two years earlier.Hildebrand said bulk buying reflects both pressure on developers and growing confidence among long-term investors.“These are long-term investors underwriting rental income and future value, and that kind of money typically moves in when pricing is near a floor,” he said.Even without bulk purchases, new condo sales increased 14 per cent from a year earlier, which Hildebrand said suggests the market may be finding a bottom, albeit from historically weak levels.Urbanation reported that pre-construction sales plunged 61 per cent year over year to just 60 units, marking the 12th consecutive quarter of annual declines.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.Urbanation said Ontario’s enhanced HST rebate is helping drive sales of completed condos, while its eligibility rules effectively exclude investors buying units in most pre-construction projects. The rebate offers eligible investors up to $130,000 in tax relief per unit, but rental properties must be mostly completed by Dec. 31, 2029, two years earlier than homes purchased by owner-occupiers. With high-rise construction typically taking four to five years, Urbanation said most new projects cannot meet the deadline.Construction began on just 381 units in a single project during the third quarter, bringing starts for the first nine months of 2026 to 2,969 units, 82 per cent below the 10-year average.Urbanation warned that the slowdown in construction could leave the region facing a “significant shortage” of new condos by the end of the decade.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.