The Greater Toronto Area (GTA) is home to approximately 8 million Canadians (about 20% of the country’s population) which account for some 20% of Canada’s Gross Domestic Product (GDP). For context, the GTA is as important to Canada’s economy as the eight largest US cities are to the American economy.

In terms of provincial per capita income, Alberta, BC and Ontario are neck in neck with an average of about 55K and a median of 40K. But, the most populous, Ontario is home to about 40% of the Canadian population, nearly twice as many as Quebec and three times as many as in BC or Alberta. In all provinces, wealthier city folks tend to fan out spending to recreational and bedroom communities within reach of the largest centers.

In a national economy that’s nearly 60% driven by consumption spending, what happens in the GTA and Ontario matters nationally.

From 2009 to 2022 as interest rates hovered near 5000-year lows, developers were pounding out condo and commercial buildings at a record pace and Toronto had more construction cranes than any other city in North America. As real estate became a national obsession, the GTA and Ontario led the way.

The real estate market doesn’t turn on a dime. Construction projects have multi-year lead times and fixed-term loans have staggered renewals. But now that interest rates have been historically normal over the past year, the GTA and Ontario are leading the downcycle, too.

The supply of condos for sale in Ontario has risen 1220% since January 2022 and the inventory-to-sales ratio is at a 14-year high.

In the GTA, new listings of all property types are on the rise and sales are in a freefall, see Toronto condo sales plummet 28% in June as sales crash across all property types:

Sales and prices were down across Toronto and the GTA for all property types.

Prices for all housing types also dropped year over year, with semi-detached seeing the greatest decline at 9.3 percent, followed by townhouses down 4.9 percent, detached at 3.3 percent and condos at 1.5 percent.

…Experts also say the condo market has become a “ghost town” as over-leveraged investors try to off-load their condo properties and end users aren’t interested in purchasing expensive, micro-sized units that can’t accommodate families.

Of course, the stress is not just in residential real estate. A ton of commercial and office space was built and begun during the ‘easy money’ ride. See, Office vacancy rate hits highest level in 30 years, according to new report: