Canadians now view condos as poor investments, but younger buyers are stepping into the market
The Canadian condo market is undergoing a fundamental reset. According to a new Leger survey commissioned by Rates.ca, 35% of Canadians now believe condos are no longer a good investment, up five percentage points from March 2025.
Meanwhile, investor appetite has dried up as prices tumble across major markets.
"Investor appetite has diminished in the current economic environment, leaving demand primarily driven by owner-occupants who typically seek larger, more functional spaces than smaller condos provide," said Steven Yanni, managing broker at HouseSigma.
In the Greater Toronto Area, average condo prices fell 6.4% year-over-year in the third quarter of 2025, with Halton experiencing steeper declines of 12.1%.
Only 17% of Canadians now believe condos have always been a good investment, down from 22% earlier this year.
Yet the market's weakness is creating an unexpected opening for first-time buyers. Among Canadians under 35, 39% said they would consider purchasing a condo, compared to just 27% of those over 35.
The difference reflects a generational divide in how buyers view condos as homeownership entry points rather than investment vehicles.
"First-time homebuyers have more choices, stronger negotiating leverage, and improved affordability after multiple Bank of Canada rate cuts," said Clara Leung, real estate broker and mortgage agent at Swivel Mortgages.
"Many are using this window to get into the market and to build equity."
New mortgage rule changes are bolstering this shift. The federal government raised the insured mortgage cap to $1.5 million and extended amortizations to 30 years for new builds. Combined with Ontario's 8% HST rebate on homes under $1 million, total savings can exceed $130,000 for qualifying buyers.
Where demand is reshaping inventory
The shift is forcing developers to reconsider design priorities. "A lot of 2010s condos were designed for investors and lack the space and functionality that many buyers need to grow into," said Yanni.
"Developers will increasingly prioritize owner-occupied units with practical living space."
The Toronto market reflects these trends. Condo sales in the $500,000 to $599,999 range accounted for 30% of transactions across March and October 2025, making this segment the most active for first-time buyers seeking affordability.
End users are showing an interest in larger units, according to DLC Clear Trust broker Micky Khaneka, but demand is continuing to plummet for small condos built specifically to be owned by investors and rented out.https://t.co/eVHRzqg5ne
— Canadian Mortgage Professional Magazine (@CMPmagazine) November 15, 2025
The buyer hesitation that persists
Despite improvements, 56% of Canadians say they have no intent to buy a condo, and non-homeowner aspirations are declining. Just 13% of non-homeowners still aspire to purchase, while 30% say they have no plans to buy.
Buyers remain cautious about economic headwinds, job stability, and whether prices have truly bottomed.
“I feel like affordability still seems to be a lot of concern for the first-time homebuyers,” DLC Clear Trust mortgage broker Micky Khaneka told Canadian Mortgage Professional.
“Even with lower rates, for the people who are most interested, unfortunately when you throw the stress test on there, there’s still a relatively high payment. Especially if it’s a single individual earning an average salary of $60,000 to $80,000 or $90,000.”
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