The condo market meltdown in Canada’s largest cities is showing no signs of fading. Experts say the market has shifted significantly over the past few months, as supply soars and demand disappears.
“We’re pretty much at a recession in the condo market,” said Robert Kavcic, senior economist at Bank of Montreal.
The downturn is concentrated in Toronto and across southern Ontario, and to a lesser extent Vancouver, he explained. Other markets, like Edmonton and Montreal, are holding up better for now.
“We’re probably going to be in this soft type of environment for a couple of years going forward,” he said.
Condo sales in the Greater Toronto Area tumbled in April, with a 30 per cent year-over-year decline, according to the Toronto Regional Real Estate Board. The average price of $678,048 was 6.8 per cent lower than the same period a year ago, and is down 16.5 per cent since the peak of the market in 2022.
Price declines in London and Barrie have been even steeper.
In Vancouver, condo sales slipped 20 per cent in April compared to 2024, according to Greater Vancouver Realtors. The benchmark price was $762,800, a 1.8 per cent decline year over year, and a nine per cent drop over the past three years.
There may be more pressure in store for the sector, though some markets may be hit harder than others. TD Bank economists predict prices will likely fall a further 10 per cent in the GTA condo resale market this year.
Real estate agent Sean Miller said in Toronto, unsold condos are piling up. Units that once would have sold in days may now take weeks.
“We’ve got seven months of inventory, which is insane, and we just don’t have the buyers to absorb it,” he said. “We haven’t seen that much inventory in 20 years.”
With so many properties to choose from, Miller said buyers are looking for deals and are able to take their time shopping around. Sellers are having to revise their expectations, and can no longer hold on to the hefty prices of the overheated market from a few years ago.
“If you’re a seller and you don’t have something that’s amazing, it’s tricky and you’ve got to be realistic,” he said.
A record wave of newly built condos is also adding to supply. In the Greater Toronto Hamilton Area alone, 29,800 units were completed last year, according to Urbanation, with more coming online in 2025.
“What we’re seeing now with all of this supply coming to completion is actually a reflection of demand conditions that existed two or three years ago,” Kavcic said. “That doesn’t exist anymore.”
The number of newly built, unsold condo units in the Vancouver region is expected to jump by 60 per cent by the end of the year, predicted realty firm Rennie & Associates.
Steve Saretsky, a realtor with Oakland Realty in Vancouver, says there’s a sea of inventory in areas like Surrey and Burnaby.
“It’s where you’ve had a lot of investment and speculation, a lot of price growth, and now just people looking to exit.”
Why the condo market is plummeting during a housing crisis
Experts are calling the condo market a buyer’s market — the issue is, many buyers have disappeared.
The first-time homebuyers, who have been waiting for an opportunity to get into the market, are still finding prices out of reach.
“Affordability has improved modestly, but it’s still very unaffordable to the vast majority of people living here,” said Saretsky.
They’re known as end users or owner occupants, who are looking for resale condos to actually live in. Many say the sizes and layouts of the units available leave a lot to be desired. Condos in Toronto, with an average floor plan of 650 square feet, are often referred to as “shoeboxes in the sky.”
Kavcic said the imbalance is the result of what was the easiest and most economical path for builders: cranking out projects with a lot of small units, which investors preferred since they just wanted to rent or flip them quickly.
“What we demographically need is larger units, with two or three bedrooms and, in a lot of cases, backyards,” he said.
For years, investors were some of the biggest buyers of pre-construction condos, lured by extremely low interest rates and the certainty of a steady stream of renters.
Now, as federal policymakers cap immigration, population growth is falling quickly. Combined with a historically high number of purpose-built rental units, rents in many cities are coming down after years of steep increases.
The average asking rent of a one-bedroom condo in Toronto fell almost six per cent in April year over year, and Vancouver fell more than four per cent, according to Rentals.ca.
That’s good news for renters. But for investors, interest rates are much higher, and the cost of carrying the property as a rental is less appealing.
“The investors are basically gone from the market right now, because rather than expectations of price increases, they have to look at things like cash flow … it just doesn’t make sense at four per cent borrowing costs,” Kavcic said.
Thousands of investors also face steep losses, as presale condos purchased a few years ago are worth less than their original value. Saretsky said in Vancouver, there are projects that pre-sold for $2,500 per square foot, but appraisals are now coming in at $1,900 per square foot.
“A cohort of investors will be scarred for a long time. They’re gonna say, you know what? I’m never buying an investment condo again,” he said. “That’s probably healthy in the long run. You get a little bit of rebalancing and you get more end users into the market.”
Miller, the real estate agent, said well-priced units with liveable floor plans are still selling. But the trade war with the U.S. is forcing many buyers to put major purchases on hold, as unemployment ticks up and consumer confidence is shaky.
“A small interest rate reduction in June could make things improve a little bit, but then something else could change that sentiment,” said Miller.
“We’re just in this time of uncertainty right now where we’ve got to ride it out.”
