Condominium prices across Toronto have fallen sharply from their pandemic-era peak, yet the segment that was once considered the entry point into homeownership is now the weakest link in Canada’s housing market, according to a range of recent industry data and analysis.
In the Greater Toronto Area, condo prices have dropped roughly 23 per cent from their peak, according to calculations by real estate data expert Christian Mijatovic cited by the Toronto Star. That decline has pulled some neighbourhoods within reach of moderate earners: in Black Creek, just north of Mount Dennis, an income of about $77,000 is now enough to qualify for the area’s median-priced condo of $355,000. At the other extreme, buying in the Bridle Path–Sunnybrook–York Mills area requires an income of roughly $267,000 for a condo priced at $1.425 million.
Cheaper Condos, Little Relief on Carrying Costs
Despite falling sticker prices, analysts caution that affordability hasn’t improved as much as headline numbers suggest. John Pasalis, founder and broker of Move Smartly Realty, said monthly mortgage costs are only down about 10 per cent from the pandemic peak even though average prices have fallen closer to 25 per cent, because higher interest rates have offset much of the price relief. By his rough calculations, a benchmark single-family home that cost about $3,700 a month to carry in 2019 rose to around $6,000 a month at the height of the pandemic and still sits near $5,500 today.
Mijatovic noted that condo fees have also been climbing year over year, eating into any savings from lower purchase prices. “Even though borrowing costs have come down from their peak, mortgage rates remain well above the ultralow levels buyers became accustomed to, while incomes haven’t kept pace with the overall cost of home ownership,” he said. The most recent Statistics Canada figures show the median total income for a one-person Toronto household was $45,200 in 2020, and $107,000 for households of two or more — both well below what’s needed to buy in most neighbourhoods analyzed.
Sales Data Shows a Sector Left Behind
While the single-family home market in the GTA has rebounded strongly — new home sales more than tripled in July compared with a year earlier, buoyed by an enhanced HST rebate program, according to the Building Industry and Land Development Association (BILD) — new condo sales barely moved, rising from 169 to 237 units over the same period. That’s still 80 per cent below the previous 10-year average, BILD said. The benchmark price for a new condo apartment was $1,054,938 in July, actually up 2.5 per cent year over year, even as new single-family home benchmark prices fell 8.5 per cent.
BILD noted condos have been slower to benefit from the HST rebate because of construction start and completion rules that limit which projects qualify. Builders were sitting on 18,546 unsold new homes across the GTA in July, including 12,345 condominium units, representing more than three years of inventory at recent sales rates.
Resale Condos Sitting Longer, Investors Under Pressure
The slowdown is also visible in the resale market. Data from digital real estate platform Wahi shows luxury and condo-heavy neighbourhoods are among the slowest-selling in the GTA, with homes in areas like Chaplin Estates in midtown Toronto averaging 77 days on the market in July, compared with just 10 days in the fastest-selling neighbourhood, Alderwood in Etobicoke. Wahi economist Ryan McLaughlin said smaller “shoebox” condo units are particularly hard to move, pointing to a wave of new condo supply hitting the market. “It’s not over yet for the condos,” he said.
In the Humber Bay Shores area, agent Luke Dalinda of Royal LePage Real Estate Services said owners of larger condo suites are increasingly holding off on listing, waiting out trade-related economic uncertainty, while investors who bought smaller “shoebox” units are often unable to wait and are being forced to sell — sometimes through power-of-sale listings as lenders step in. Broader GTA sales dipped 1.3 per cent in August from July, according to the Toronto Regional Real Estate Board, ending five straight months of improving sales, while the average price fell 2.7 per cent year over year to $993,410.
A National Supply Problem Concentrated in Condos
The Canada Mortgage and Housing Corporation says the country needs between 417,000 and 469,000 new housing units per year over the next decade to restore 2019-level affordability by 2036, but construction is running well below that pace, with roughly 231,000 units a year currently on track. CMHC deputy chief economist Aled ab Iorwerth warned that “new construction is slowing faster than demand,” risking a future shortage.
The agency singled out weak condo market conditions as a factor making developers cautious about launching new projects. It found Toronto’s construction activity has weakened sharply, particularly for condos, even as lower prices have narrowed the city’s overall supply gap. Montreal and Ottawa are seeing their supply gaps widen, with new construction concentrated in rental housing rather than ownership units, while Calgary’s housing supply gap has narrowed by nearly half thanks to record construction, and Edmonton remains the only large market without a supply gap.
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