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Construction of a condominium project in Toronto is seen in this file photo.Fred Lum/The Globe and Mail

Toronto's condo sector has seen rising numbers of newly built, but unsold condos this year, raising red flags among some industry watchers. But Canadian Imperial Bank of Commerce economist Benjamin Tal insists those who see the trend as a sign of a condo bubble about to pop "are barking up the wrong tree."

There are 2,000 completed, but unsold condos in the Greater Toronto Area, Mr. Tal wrote in a research note released Monday morning, about double the number there were in December, and above the long-term average for the region. Nearly half of those are in the City of Toronto. Many are the echoes of record levels of housing starts in 2012, when developers began construction on 50,000 homes, of which 30,000 were condos.

But, Mr. Tal notes, high levels of unsold units are not a region-wide phenomenon. In fact, a quarter of unsold condos are in just five buildings, out of 139 active projects, he says. Almost a third could be attributed to just four out of 77 builders. (Mr. Tal does not detail which projects, or builders, are facing a backlog of unsold units.) While he dismisses the idea that Toronto's condo market is facing "increased vulnerability," he does see stiff headwinds ahead for the sector. "To be sure, the GTA's condo market will be tested as interest rates start rising in the coming years, and increased resale activity from domestic condo investors will result in excess supply and some downward pressure on prices," he writes.

Vancouver, meanwhile, is facing the opposite issue. The number of completed but unsold condos in the city has fallen from more than 2,000 last year to 1,100 this year, the lowest in five years.