Prominent economist Will Dunning warned in a report today that Toronto`s hot condominium market could cool off. 30%-50% of units sold in buildings are purchased by speculators who are looking for high returns. Those investors are now selling because of the lower than expected returns and high holding costs. Very simply, there is too much supply; no one is buying, so prices are coming down. In 2009, there will be a new record set for the number of completed condo units. Just last September, there were just under 35,000 condos for sale in the GTA, which is more than three times the GTA`s average. In fact, the number of units for sale are up 75% in November, and prices are continuing to fall sharply. This could be a dangerous time for speculators who don`t have as much capital to support carrying costs, especially given the high volatility and job losses. Please see my other posts for my thoughts on the real-estate market.