Canada’s condo market is emerging as the weak link in an already uneven national housing picture, with fresh data from Montreal, Calgary and Toronto pointing to falling resales, softening prices and a growing glut of unsold units heading into the final months of 2026.
A report released by RBC Economics on October 7 found that conditions are diverging sharply across the country’s largest markets, shaped by local factors including inventory levels, affordability and confidence, and compounded nationally by renewed Canada-U.S. trade tensions. Robert Hogue, assistant chief economist at RBC Economics and author of the report, said “diverging trends across the country reflect different states of confidence, affordability, pent-up demand, demographics, job markets and market inventory.”
Condos Underperform Detached Homes
Nowhere is the split between housing types clearer than in Calgary, where single-detached homes saw a 4.4 per cent increase in resales and only a 1 per cent price decline compared with 2025. Condo apartments in the same market told a starkly different story, with resales down 14.3 per cent and prices falling 8.3 per cent, according to Hogue. He described Calgary’s overall market as largely stable this year, with inventory tracking close to last year’s levels and supply and demand in balance — but that stability clearly did not extend to condos.
In Montreal, the condo segment is also lagging the rest of the market. The Quebec Professional Association of Real Estate Brokers reported a 12 per cent year-over-year drop in Greater Montreal sales for September, alongside a 14th consecutive month of rising inventory, now 18 per cent above the 10-year average. Royal LePage broker Marc Lefrançois told CTV News the condo market specifically is slowing “across the island because of oversupply and smaller builds,” adding that “anybody who bought a condo in the last two to three years, especially downtown, is at a bit of a loss right now.” He said single-family properties remain relatively stable and are still edging up in price, in contrast to condos.
Condo Market Pressure Points, September 2026
Toronto’s Recovery Stalls, Vancouver Stays in Correction
Toronto’s broader housing market, which had been on a gentle upswing from spring through August, reversed course in September, according to the RBC report. Resales fell 5.2 per cent and the benchmark price dropped 0.5 per cent month-over-month. Hogue attributed the stumble to renewed trade-war escalation and long-term interest rate concerns that “put buyers on the defensive.”
Vancouver remains “squarely in correction mode,” Hogue wrote, with active listings still near decade highs and no clear sign the slump will ease soon. He said further price declines will likely be needed to draw buyers back, a trend he expects to continue through the rest of 2026 and possibly into 2027. Affordability concerns continue to keep buyers on the sidelines in that market despite falling prices.
Rental and Investment Pressures Add to the Strain
The softness isn’t confined to resale condos. Aurelio Baglione, CEO of Virtus Group of Companies, told BNN Bloomberg that multi-unit residential has seen the greatest impact of any property segment his firm tracks, with apartment rents pulling back in some markets and new rental projects taking longer to lease. He said federally insured mortgages, through CMHC, can still make some residential developments financially viable at current rates below four per cent, but properties purchased at previously low capitalization rates are much harder to make profitable now. Baglione said owners of hard-to-sell development or infill projects are increasingly being forced to sell other assets, creating more buying opportunities for investors like himself.
A Deeper Supply Problem
The condo slowdown comes as Canada continues to grapple with a broader construction shortfall. Housing starts have hovered around 250,000 annually over the past two years, according to the Canada Mortgage and Housing Corporation, which estimates that between 417,000 and 469,000 units need to be built annually by 2036 to restore 2019-level affordability. CMHC chief economist Mathieu Laberge said the gap is “putting future affordability at risk,” citing pent-up demand from younger Canadians and newcomers.
Ottawa’s Build Canada Homes initiative, launched roughly a year ago to accelerate affordable housing construction, has so far committed to about 19,000 units nationally, with only around 2,000 currently under construction. Dave Wilkes, president and CEO of the Building Industry and Land Development Association, said incentives such as the HST rebate on new homes and reduced development charges in Ontario have helped recalibrate overheated markets like Toronto, but acknowledged the pace of progress remains slow: “I like to say I work for an industry that measures patience in terms of seconds.”
Meanwhile, in Ottawa, where fall inventory has reached roughly 4.5 months’ worth of supply, real estate agent Greg Hamre said buyers currently have more selection and less competition than usual, even as rising mortgage rates — now around 4.5 per cent compared with the high-threes seen months earlier — narrow the pool of qualified purchasers. Ottawa’s average home sale price stood at $633,253 in August, up 0.3 per cent from a year earlier despite a 24 per cent drop in sales volume that month.
Taken together, the data suggest that while Canada’s housing market overall remains fragile and regionally inconsistent, the condo segment specifically is bearing a disproportionate share of the current slowdown, squeezed between oversupply, softening rents and buyers who remain cautious amid trade and affordability pressures.
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