Following four consecutive months of sales surpassing 2022 levels, renewed concerns over higher interest rates are likely to slow the homebuying activity in the GTA condo market in the coming months, according to a new report from RE/MAX. 

Overall sales of condo apartments and townhouses in the GTA year-to-date (January to August) are off last year's pace by 12.8 per cent at 18,263, compared to the 20,948 units sold during the same period in 2022. 

The report examined close to 100 communities across Canada, and revealed that condo sales fell in all but two of the country's seven largest real estate markets in the first eight months of 2023. 

In Toronto, a sizeable uptick in new listings in August contributed to growing concerns, and the city's apartment inventory rose almost 24 per cent year-over-year while townhouse stock saw a more moderate increase of 7.5 per cent. 

The report analyzed condo sales in nearly 100 communities across Canada. Source: RE/MAX.

However, affordability still remained a top concern for many first-time buyers in the region, and despite some softening in overall values, carrying costs proved to be too prohibitive for many buyers at today's current interest rates. 

According to the report, new condominium construction also slowed considerably in most markets across the country, with many new projects delayed or cancelled. 

"In some cases, city approvals have slowed the process, but in most cases, the financial viability of the project just doesn't make sense in the current economic environment. Not surprisingly, the most active areas in every market are often those areas where affordable condominium product can be found," the report reads. 

In response to heightened prices, potential homebuyers are also peeking into markets outside of the downtown core. 

"Those that are committed to buying, including first-time buyers, investors, and downsizers are willing to travel further afield to realize value, as evidenced by the uptick in condominium sales in the 905 where buyers realize more bang for the buck," the report revealed. 

With demand now moderating amid improved supply levels, there is also a potential for a further incremental decrease in condominium values in the GTA in the months ahead. 

"The only stop guard is the over 35 condominium projects slated for launch that may be placed on hold or even cancelled as developers pause and wait for condominium markets to stabilize," the report says. 

"The oversupply of listings will likely be absorbed as vacancy rates in the city remain low, but how quickly it will take to resolve will be dependent on interest rates and consumer confidence levels."