Toronto condo craze cooling

Toronto's condominium building boom appears to be coming to an end.

Jeanhy Shim of Think Build Consulting, which specializes in Toronto's condo market, says sales of new units are off 25 per cent in 2008.

In 2007, a record-breaking 295 condo projects were approved in the GTA.

But according to Shim, condo developers are now faced with some real challenges as demand softens and banks tighten their lending.

One reason for the slowdown is the U.S. mortgage crisis.

"With the credit crunch, what's happened is a lot of the deposit structures are more strict. And also banks require that developers must put more of their own equity into projects," said Sim.

Local factors such as rising land and construction costs could also make it difficult to keep prices down.

And while the resale market is strong, analysts warn that could change if there's a downturn in employment.