Condo prices across much of Canada have fallen sharply from their pandemic-era peaks, theoretically putting ownership within reach of more buyers. But a combination of stubbornly high mortgage rates, rising condo fees and a looming supply squeeze means the affordability gains are proving far shallower than the headline price drops suggest.
In the Toronto area, condo prices have dropped 23 per cent since their 2022 peak, according to an analysis by real estate data expert Christian Mijatovic reported by the Toronto Star. That decline has pulled some neighbourhoods within reach of moderate earners for the first time in years.
Where the Math Still Works
Mijatovic’s neighbourhood-by-neighbourhood breakdown, based on Toronto Regional Real Estate Board data from January to July, found the income needed to buy varies enormously by pocket of the city. In Black Creek, just north of Mount Dennis, a condo with a median price of $355,000 required an income of roughly $77,000 to qualify under current mortgage rules. At the other extreme, the Bridle Path—Sunnybrook—York Mills area, Toronto’s priciest condo market, had a median price of $1.425 million and required an income of about $267,000.
For comparison, detached homes required far more: $140,000 in income in the most affordable neighbourhood, Mount Dennis, and $893,000 in Bridle Path, where the median detached home price approached $5 million. Across the Toronto region as a whole, buying a home near the roughly $1-million average price required a household income of about $195,000 as of July, according to Ratehub.ca. Jamie David, Ratehub’s vice-president of mortgages, said price declines were the main driver of that modest affordability improvement, and prices fell further in August, dipping just under $1 million for the first time since January, per TRREB data.
Carrying Costs Tell a Different Story
Despite the price declines, the cost of actually carrying a mortgage has not improved nearly as much, according to John Pasalis, founder and broker of Move Smartly Realty in Toronto. By his rough calculations, the monthly mortgage cost on an average single-family home was about $3,700 in 2019, jumped to roughly $6,000 at the pandemic peak, and has only eased to around $5,500 today — still nearly 50 per cent above pre-pandemic levels.
“On the surface, things look like affordability is improving, average prices are down, close to 25 per cent from the peak. But the challenge is when you factor in interest rates, we’re not that much better off,” Pasalis said. Mijatovic added that rising condo fees have further eaten into the savings buyers might otherwise see from lower purchase prices, even as the segment becomes nominally more attainable than detached housing.
Rising Rates Threaten a Fragile Recovery
Any further affordability progress is now under threat from a renewed climb in borrowing costs. The Canada five-year bond yield, which lenders use to price fixed mortgage rates, hit a two-year high of 3.72 per cent in late September, pushing fixed rates up more than a quarter-point over the past month and toward the mid-4-per-cent range, according to the Globe and Mail. David Larock of Integrated Mortgage Planners said further hikes are possible once lenders stop aggressively competing for the wave of pandemic-era mortgages now renewing.
Nationally, the Canadian Real Estate Association reported home sales fell 6.9 per cent in August compared with a year earlier, with new listings up 3.3 per cent from the prior month and the national benchmark price down 3 per cent year over year. CREA senior economist Shaun Cathcart downgraded the association’s 2026 and 2027 forecasts, citing this fresh round of headwinds.
Canada's National Housing Market Snapshot (August 2026, CREA)
RBC’s national affordability measure also showed the improvement cycle stalling, with its aggregate measure edging just 0.4 percentage points better to 52.8 per cent in the second quarter — the smallest gain in nearly a year. RBC economist Rachel Battaglia noted the entire gain came from rising incomes rather than falling prices or rates, and warned that rising bond yields and possible Bank of Canada hikes next year could reverse recent progress. Vancouver remained the country’s least affordable market by a wide margin, at 83.9 per cent, while Calgary (41.3 per cent), Edmonton (36.8 per cent), Saskatoon (33.2 per cent) and Regina (27.9 per cent) sat closer to their historical norms.
A Supply Squeeze Building Beneath the Surface
Even as demand softens, the condo segment faces a structural supply problem. RBC noted that depressed housing starts — particularly among condos, which have contracted sharply over the past two years — are expected to tighten supply in coming quarters. In Calgary, weak demand for condos has kept prices about 8 per cent below year-ago levels even as detached home prices held up far better, illustrating how unevenly the slowdown is hitting different parts of the housing stock.
Andrew Lis, chief economist for Greater Vancouver Realtors, said slow immigration and falling rents are discouraging investors from entering the market, a dynamic with particular relevance for condos, which have traditionally attracted investor buyers. “You take all these factors together, and my opinion is this equates to a market that will probably move sideways for some time until these factors resolve,” Lis said, pointing to a pickup in immigration as the key trigger for change.
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