Toronto's condo slump is quietly turning into an opening for regular buyers. Condominiums across the Toronto area have been bulk-sold at discounts reported as high as 45 per cent, and access to those discounted units is now extending beyond institutional purchasers to individual buyers, according to reporting rounded up by UrbanToronto on Wednesday.
The bulk-buying wave grew out of the market's downturn. Many of the condos built during the boom were aimed at investors, and when higher interest rates dried that demand up, developers were left holding unsold inventory. Bulk purchasers such as High Art Capital and Jesta Group have been buying large blocks of units at a time, with one legal estimate putting typical bulk discounts at 30 per cent or more below asking levels.
The strategy for those buyers is patient money: hold and rent the units for income in the short term, then sell in roughly five years if the market recovers. One recent example saw High Art Capital pay $22.3 million for 43 unsold condos near Yonge and Eglinton, a per-square-foot price well below the GTA average for individual sales.
For developers, the trade-off is stark. A bulk price can come in below replacement cost and, in some cases, barely clear the construction loan, but it converts frozen inventory into cash now. With bulk deals estimated to account for a substantial share of new condo sales, the channel that was once a last resort is becoming a central feature of how Toronto's condo overhang gets cleared — and individual buyers are starting to share in the discounts.
