The resale condo market, meanwhile, is forecast to be up 30 per cent in July from the same time last year, according to some estimates.

Developers were also quick to react to the recession by changing floor plans to offer smaller units and giving fewer amenities at a lower price point. While the market shows a potential bottoming out in the first quarter, no one is claiming victory yet.

Second-quarter sales are still down 40 per cent from the same quarter in 2008. That quarter saw 4,962 sales, just before the market started to correct rapidly as the recession hit.

Analysts have also repeatedly warned there are 35,618 condominium units under construction in the Toronto area, which could create a glut when most are completed this year and next.

"There is some concern, because that amounts to a three year supply," said Myers.

However, strong sales in the existing home market for condos means much of that supply is being whittled down. "The uncertainty in the new construction market may have driven buyers to the more predictable resale market," said Myers.

Urbanation reported 4,893 sales of resale condos in the second quarter, a new record high. One big reason is that resale condos are cheaper than new condos.

The average price for a new condo in the second quarter was $474 per square foot compared to $326 per square foot in the resale market.

Meanwhile, fewer developers are starting fewer projects. Only two new towers went to market in the second quarter. As well, some projects have stalled, with three being pulled off the market as sales fizzled. Other projects such as 1 Bloor E., which was supposed to be the tallest residential tower in the city, are in limbo. The site is for sale after developers defaulted on loans.

"After the global meltdown, banks are leery of lending money to any large scale projects," said Myers.

Analysts are hopeful that with fewer new projects and low interest rates, new condo sales will stabilize.

The Toronto Star-Aug 5, 2009