The condo market is slowing down. Where are all the buyers?

The condo marketplace meltdown successful Canada's largest cities is showing nary signs of fading. Experts accidental the marketplace has shifted importantly implicit the past fewer months, arsenic proviso soars and request disappears.

"We're beauteous overmuch astatine a recession successful the condo market," said Robert Kavcic, elder economist astatine Bank of Montreal.

The downturn is concentrated successful Toronto and crossed confederate Ontario, and to a lesser grade Vancouver, helium explained. Other markets, similar Edmonton and Montreal, are holding up better for now.

"We're astir apt going to beryllium successful this brushed benignant of situation for a mates of years going forward," helium said.

Condo income successful the Greater Toronto Area tumbled successful April, with a 30 per cent year-over-year decline, according to the Toronto Regional Real Estate Board. The mean terms of $678,048 was 6.8 per cent little than the aforesaid play a twelvemonth ago, and is down 16.5 per cent since the highest of the marketplace successful 2022.

Price declines in London and Barrie person been adjacent steeper.

In Vancouver, condo income slipped 20 per cent successful April compared to 2024, according to Greater Vancouver Realtors. The benchmark terms was $762,800, a 1.8 per cent diminution twelvemonth implicit year, and a 9 per cent driblet implicit the past 3 years.

There whitethorn beryllium much unit successful store for the sector, though immoderate markets whitethorn beryllium deed harder than others. TD Bank economists foretell prices volition apt autumn a further 10 per cent successful the GTA condo resale marketplace this year.

Soaring supply

Real property cause Sean Miller said successful Toronto, unsold condos are piling up. Units that erstwhile would person sold successful days may present instrumentality weeks.

"We've got 7 months of inventory, which is insane, and we conscionable don't person the buyers to sorb it," helium said. "We haven't seen that overmuch inventory successful 20 years."

With truthful galore properties to take from, Miller said buyers are looking for deals and are capable to instrumentality their clip buying around. Sellers are having to revise their expectations, and tin nary longer clasp connected to the hefty prices of the overheated marketplace from a fewer years ago.

"If you're a seller and you don't person thing that's amazing, it's tricky and you've got to beryllium realistic," helium said.

A grounds question of recently built condos is besides adding to supply. In the Greater Toronto Hamilton Area alone, 29,800 units were completed past year, according to Urbanation, with much coming online successful 2025.

"What we're seeing present with each of this proviso coming to completion is really a reflection of request conditions that existed 2 oregon 3 years ago," Kavcic said. "That doesn't beryllium anymore."

The fig of recently built, unsold condo units successful the Vancouver portion is expected to leap by 60 per cent by the extremity of the year, predicted realty steadfast Rennie & Associates.

Steve Saretsky, a realtor with Oakland Realty successful Vancouver, says there's a oversea of inventory successful areas similar Surrey and Burnaby.

"It's wherever you've had a batch of concern and speculation, a batch of terms growth, and present conscionable radical looking to exit."

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Disappearing demand

Experts are calling the condo marketplace a buyer's marketplace — the contented is, galore buyers person disappeared.

The first-time homebuyers, who have been waiting for an accidental to get into the market, are inactive uncovering prices retired of reach.

"Affordability has improved modestly, but it's inactive precise unaffordable to the immense bulk of radical surviving here," said Saretsky.

They're known arsenic extremity users oregon proprietor occupants, who are looking for resale condos to really unrecorded in. Many accidental the sizes and layouts of the units disposable permission a batch to beryllium desired. Condos successful Toronto, with an mean level program of 650 quadrate feet, are often referred to arsenic "shoeboxes successful the sky."

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Kavcic said the imbalance is the effect of what was the easiest and astir economical way for builders: cranking retired projects with a batch of tiny units, which investors preferred since they conscionable wanted to rent oregon flip them quickly.

"What we demographically request is larger units, with 2 oregon 3 bedrooms and, successful a batch of cases, backyards," helium said.

For years, investors were immoderate of the biggest buyers of pre-construction condos, lured by highly debased involvement rates and the certainty of a dependable watercourse of renters.

Now, arsenic national policymakers headdress immigration, colonisation maturation is falling quickly. Combined with a historically precocious fig of purpose-built rental units, rents successful galore cities are coming down aft years of steep increases.

The mean asking rent of a one-bedroom condo successful Toronto fell astir six per cent successful April twelvemonth implicit year, and Vancouver fell much than four per cent, according to Rentals.ca.

That's bully quality for renters. But for investors, involvement rates are overmuch higher, and the outgo of carrying the spot arsenic a rental is little appealing.

"The investors are fundamentally gone from the marketplace close now, due to the fact that alternatively than expectations of terms increases, they person to look astatine things similar currency travel … it conscionable doesn't marque consciousness astatine 4 per cent borrowing costs," Kavcic said.

Thousands of investors besides look steep losses, as presale condos purchased a fewer years agone are worthy little than their archetypal value. Saretsky said successful Vancouver, determination are projects that pre-sold for $2,500 per quadrate foot, but appraisals are present coming successful astatine $1,900 per quadrate foot.

"A cohort of investors volition beryllium scarred for a agelong time. They're gonna say, you cognize what? I'm ne'er buying an concern condo again," helium said. "That's astir apt steadfast successful the agelong run. You get a small spot of rebalancing and you get much end users into the market."

Miller, the existent property agent, said well-priced units with liveable level plans are inactive selling. But the commercialized warfare with the U.S. is forcing galore buyers to enactment large purchases connected hold, arsenic unemployment ticks up and user assurance is shaky.

"A tiny involvement complaint simplification successful June could marque things amended a small bit, but past thing other could alteration that sentiment," said Miller.

"We're conscionable successful this clip of uncertainty close present wherever we've got to thrust it out."