Canada’s condo market is showing signs of strain as rising construction costs, falling rents and shrinking resale activity converge across the country’s largest cities, according to a series of recent industry reports.
A joint report from Rentals.ca and Urbanation found average asking rents across Canada fell 4.8 per cent over the past year, with declines sharpest in cities most exposed to the U.S.-Canada trade war. Oshawa, Ont. saw rents drop nearly 11 per cent, while Windsor — despite heavy tariff exposure — saw only a 2.4 per cent decline due to thinner rental supply. The report said Calgary, Windsor, Kitchener-Cambridge-Waterloo, Brantford, Guelph, Hamilton, Trois-Rivieres, Lethbridge, Thunder Bay and Oshawa rank among the most tariff-exposed markets, while Vancouver, St. John’s, Saskatoon, Halifax and Victoria are among the least exposed.
Construction Costs Climb as Condo Starts Fall
The report pointed to steel tariffs — a 50 per cent U.S. levy met with an equivalent Canadian counter-tariff — as a growing pressure point. Statistics Canada’s Building Construction Price Index showed metal fabrication costs rose 2.1 per cent quarter-over-quarter, while structural steel prices climbed 1.8 per cent over the same period and 7.2 per cent since early 2025. Toronto and Vancouver, which rely heavily on highrise construction, are considered especially vulnerable because condo starts have already fallen, leaving fewer projects to absorb rising input costs.
“With little to no condo construction to fall back on, Toronto and Vancouver are doubly exposed to potential price shocks on the supply side,” the Rentals.ca-Urbanation report stated. It added that purpose-built rental construction has slowed since peaking in 2021, as fewer buyers enter the condo or broader housing market, and warned that developers facing falling rents and rising costs could shelve or cancel projects altogether.
Condo Resales Lag Behind Detached Homes
A separate RBC Economics report, authored by assistant chief economist Robert Hogue, found that conditions are diverging sharply across Canada’s major housing markets heading into the fall buying season. In Calgary, single-detached home resales rose 4.4 per cent with prices down just 1 per cent compared to 2025. Condo apartments in the same market told a different story, with resales falling 14.3 per cent and prices dropping 8.3 per cent.
Hogue noted that most local real estate boards — including Hamilton, Kitchener-Waterloo, Toronto, Ottawa, Vancouver and Montreal — reported drops in home resales in September. Toronto’s brief spring-and-summer rally reversed course, with resales down 5.2 per cent and benchmark prices down 0.5 per cent month-over-month in September, which Hogue attributed to renewed trade-war escalation and interest rate concerns denting buyer confidence. Vancouver remains “squarely in correction mode,” he said, with active listings still near decade highs and further price depreciation likely needed to draw buyers back. Montreal, by contrast, has seen inventory rise 20 per cent year-over-year, the strongest influx of sellers in six years, which Hogue said is limiting price growth there.
Calgary Condo vs. Detached Home Performance (Year-over-Year)
Policy Response and Supply Gap
Against this backdrop, federal efforts to boost housing supply remain in early stages. Build Canada Homes, the federal Crown corporation launched roughly a year ago, has committed to supporting construction of about 19,000 affordable units nationwide, but only around 2,000 are currently being built. “I think we can always go faster,” said Dave Wilkes, president and CEO of the Building Industry and Land Development Association, though he credited Ontario’s HST rebate and reduced development charges with helping recalibrate overheated markets like Toronto.
CMHC chief economist Mathieu Laberge said housing starts have hovered around 250,000 annually over the past two years, and that the pace needs to roughly double to restore 2019-level affordability nationally. CMHC estimates 417,000 to 469,000 units must be built annually by 2036 to close that gap. Laberge said pent-up demand from younger Canadians and newcomers continues to build, and that both market and non-market housing are needed to address affordability. “There’s no wrong supply in this case,” he said.
In a separate CMHC commentary, researchers suggested that U.S. tariffs could paradoxically ease some domestic cost pressures by making Canadian wood products less attractive to American buyers, potentially leaving more lumber supply at home for ground-oriented housing. The report noted wood costs, once among the fastest-rising construction inputs during the pandemic, have since stabilized following the introduction of tariffs, though it flagged a lack of east-west transportation infrastructure as an obstacle to redirecting domestic wood supply toward the markets that need it most.
In Ottawa, meanwhile, local conditions have offered a somewhat different picture, with the city’s real estate board reporting August home sales fell 18.6 per cent year-over-year even as the average sale price held relatively steady at $633,253, up 0.3 per cent from a year earlier.
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