That’s the finding of a report by the Canada Mortgage and Housing Corp. which shows that 79 per cent of condo projects are only started once at least 70 per cent of the units have been sold. Generally the only exceptions are for smaller developments.
“Condo building activity in Toronto seems to be well managed. In spite of this encouraging information, future inventory management remains critical,” commented Dana Senagama, Principal Market Analyst, GTA Canada Mortgage and Housing Corporation.
The CMHC says that unsold inventory is largely concentrated in downtown Toronto and Markham where the condo markets are more active. Where there are large numbers of unsold units, these are developments which began construction before reaching the threshold of 70 per cent sold.
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Overbuilding is not a major issue in the Greater Toronto Area as builders don’t start construction until the majority of homes are sold.