Toronto Condo Market 2025: “Ground Zero” of Canada’s Condo Implosion
🔻 Current Situation
Toronto’s condo market is in freefall, as described by Canada’s housing minister Gregor Robertson.
Buyers, developers, and lenders are all asking the same question: How low can it go?
Listings are sitting for weeks—even months—without showings or offers, which is unprecedented in two decades.
Example: A condo 20 minutes north of Toronto got 1 showing in 3 months, and only sold after a $40,000 price drop.
💸 Key Causes
Fear and Economic Stress
Rising supply, negative headlines, and investor pullback.
Rental returns are shrinking; “the numbers just don’t work.”
Private lending has dried up, with small lenders collapsing due to defaults.
Mortgage Pressure
Power of sale (foreclosure) listings are increasing to multi-year highs.
Mortgage delinquencies rose from 0.14% to 0.22%, still low but trending upward.
60% of mortgages will renew by 2026, mostly at higher rates → more financial strain.
Falling Immigration
Population growth reversal: Ontario added only 983 immigrants in Q1 2025 — a 99% drop year-over-year.
Fewer newcomers → fewer renters & buyers → more inventory sitting.
🏚️ Market Impact
Condo investors who bought at peak prices are underwater and losing money monthly.
Rents are dropping, discouraging investors and creating a vicious cycle—more supply, less demand, lower returns.
Confidence is evaporating, and confidence is the “lifeblood” of the real estate industry.
New condo completions over the next 4–6 quarters will flood the market further, pushing prices and rents down.
🌤️ Silver Lining
Affordability is improving:
In 2022, the average household spent 31% of income on mortgage payments.
In 2025, it’s closer to 24%, even before factoring in 30-year amortizations.
For patient buyers with financing ready, this could be a rare long-term buying opportunity.
📉 When Will It Hit Bottom?
Analysts expect softness until at least 2027, but recovery signs will include:
Monthly sales volumes rising
Lease rates stabilizing or climbing
Mortgage rates around 3%
Price per sq. ft. increasing in key areas
Fewer listings and shorter days on market
When these five indicators align, it will likely signal the start of a rebound.
🏡 Buying Smart in a Down Market
What to Buy:
1+den or 2-bedroom units
Over 700 sq. ft., with functional layouts
Buildings with strong management and clean financials
What to Avoid:
Studios or micro-units
Investor-heavy towers
High-maintenance or lawsuit-prone buildings
Poor walk scores or transit access
Buildings with 30%+ short-term rentals
Tip: Focus on quality and staying power, not just price. Check comparable listings and how long they’ve sat on the market.
💬 Final Thought
“Real estate doesn’t stay broken forever. When it comes back, it often comes back fast. The key question is — will you be ready when it does?”
