A condo revival in the city? Don't count on it
Condo prices are still on the way down in Toronto, sliding by 9.3% across the city and its outskirts last month compared with the same time in 2024 as the crisis gripping the market continued to gather momentum.
Year to date, condo sales have plunged by 18% – and with even more units expected to complete in the next 18 months, supply only looks likely to swell further.
According to Urbanation, 17,117 condos were scheduled for completion during the second half of this year, meaning a glut of new inventory even as demand continues nosediving.
Declining prices sparked some hope that first-time buyers previously frozen out of the market would take advantage of the opportunity to make their move now.
But most buyers still feel the cooldown has plenty of room to run, according to Tango Financial mortgage agent and Rates.ca mortgage and real estate expert Victor Tran (pictured top), who told Canadian Mortgage Professional that price drops seen to date haven’t changed the picture significantly.
“I have a few condo buyers, but there’s really no rush for that,” he said. “There’s inventory there. The thing is that if you know something’s going to go on sale in a couple of weeks or even a month, you might as well just wait it out.
“If you’re in the market for a television and you know Black Friday is just around the corner, just wait it out in a couple of weeks. Get it on sale. And that’s the thought with a lot of condo buyers right now: They’re afraid to purchase a condo and by the time they close, that value is going to be less than what they bought it for.”
Rental market outlook suddenly brightening for Torontonians
What’s more, rents are steadily falling across most Canadian cities – and Toronto is no exception, with a recent RBC analysis showing the average two-year bedroom unit price fell by $160 in the first quarter compared to the same time last year.
Immigration cuts have led to slower population growth and a lower number of international students in the city, normally key drivers of demand in Toronto’s rental market.
Lower monthly costs are giving renters more options in the city and easing the urge to buy a property as soon as possible, Tran said.
“If a lot of people are not happy with their current living arrangements, there’s plenty of rental units out there right now to choose from,” he said. “And you’ll likely be able to find the rent a little bit lower than what you secured your rent for in the higher days. So there are options out there for a lot of tenants.”
That’s a sharp contrast to the immediate aftermath of the COVID-19 pandemic, when average rents shot through the roof in Toronto as demand surged – part of the reason condo units, particularly smaller so-called “dog crate” apartments downtown, became such a prized asset for investors.
Robert Hogue, RBC’s assistant chief economist, says easing economic concerns and lower interest rates are drawing buyers back, though affordability and inventory challenges will remain.
— Canadian Mortgage Professional Magazine (@CMPmagazine) August 13, 2025
Read more on RBC’s housing market outlook.https://t.co/egkuLMFYYa
Toronto housing market demand unlikely to heat up in the months ahead
Overall home sales unexpectedly rose across the GTA in July despite the still-sluggish condo market. In the city centre, condo sales actually inched upwards by 3.4% last month – although that increase trailed detached, semi-detached, and townhouse properties, all of which posted much bigger increases.
But that pickup in activity is unlikely to convince many buyers that the market has reached a bottom yet, according to Tran, because supply is far outstripping demand and sales are muted by historical standards.
The prospect of more inventory coming on stream between now and the end of the year, meanwhile, means plenty are happy to wait it out and potentially find even more buying options in the months ahead.
“It’s pretty scattered in terms of the types of homes being sold. A lot of detached homes and semis are doing very well,” he said.
“Real estate agents and brokerages out there definitely will capitalize on this opportunity and try to entice people to get back into the market and say they might as well buy now before it’s too late. But I would imagine inventory will continue to increase going into the end of the year.”
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