Condo sales plummet in Toronto and Vancouver but more resilient elsewhere

The condo market in Canada’s two largest cities has experienced significant decline from 2022 to the end of the first quarter of 2025, according to the most recent report from Canada Mortgage and Housing Corporation (CMHC). Though most smaller markets are still stable. The report, released Monday, said that condo sales in Toronto are down 75 per cent. In Vancouver they have fallen 37 per cent. Those condo markets were hot until 2022, with lower interest rates enticing buyers, investors and builders. However, higher interest rates have reduced affordability for homebuyers and returns for investors. Overall, CMHC expects the housing market to grow as lower mortgage rates and changes to mortgage rules unlock pent-up demand. However, the recovery will be uneven with the condominium apartment market lagging in parts of the country where many condo owners are investors struggling with rising costs and softening rents. What conditions are prevalent in the Toronto condo market? Data from the Toronto Regional Real Estate Board (TRREB) supports the CMHC conclusion about the condo market in Canada’s largest city. Condo sales in the Greater Toronto Area (GTA) dropped 21.7 per cent year-over-year in the first quarter of 2025, with 3,794 units sold compared to 4,843 the previous year. Inventory has surged in Toronto, with more than 20,000 unsold condo units , including pre-construction, under-construction, and completed units. Meanwhile, listings are up 25.2 per cent year-over-year in the GTA, giving buyers more negotiating power and putting downward pressure on prices. While average condo prices have begun to decline that trend is not as steep as the drop in sales. In the GTA, the average selling price in the first quarter of 2025 was $680,146, a 2.2 per cent drop from the previous year. Resale condo prices in the GTA have fallen 16 per cent  from their peak in early 2022. Echoing a CMHC observation, the TRREB says the GTA market is heavily investor-driven, with nearly 75 per cent of Toronto condos owned by investors . Even more disastrous is that over 80 per cent of investors in new condos in the GTA are losing $1,000–$1,500 per month per unit due to high interest rates and rising costs. Many can’t raise rents enough to offset losses because of rent controls and a competitive rental market. New condo construction starts are down 79 per cent from last year and 88 per cent from the 10-year average in the GTA, hitting the lowest level since 1996 . With sales activity at record lows, developers cannot secure financing, leading to project delays, cancellations, and a sharp drop in new construction. Some experts believe that once interest rates fall and economic confidence improves, demand could rebound , but the timing and extent of any recovery remain uncertain. What about Vancouver’s condo market? Rising inventory and limited presales have stalled condominium projects in recent months, says CMHC. A recent Greater Vancouver Realtors report says more than 2,000 new condos in Metro Vancouver are sitting unsold and empty. Meanwhile, there are over 16,000 listings, the most in over a decade. “While more resales and lower mortgage rates will help with some of these concerns,” says CMHC, “developers will continue to find it difficult to build new condominium projects closer to the city centre. This is due to lower demand for presales at higher prices needed for project feasibility.” What is happening in condo markets in other parts of the country? While Toronto and Vancouver are experiencing the sharpest downturns in the condo market, other Canadian cities are showing more resilience , with some even presenting growth opportunities for buyers and investors. In Alberta, more buyers are actual residents as opposed to investors, says CMHC, therefore the impact on new construction will be minimal. The rapid price growth in Calgary and Edmonton real estate markets are expected to level out in 2025 because of rising interest rates. The number of condos for sale in Edmonton is expected to increase, which will provide buyers with more options. Calgary’s price growth may continue but more slowly, while prices in Edmonton may surge due to population growth and economic resilience. There are fewer investors and stronger resale markets in B.C. , says CMHC, therefore the slowdown in condominium apartment construction will be milder and delayed. The condo market in Surrey, B.C. is rapidly expanding, offering affordable property and strong investment opportunities. The population is booming, nearing 684,000, with major infrastructure projects like the Surrey-Langley SkyTrain extension. It’s a buyer’s market with condos averaging $553K and detached homes around $1.53M.  The CMHC expects housing starts in Montreal to increase for a second consecutive year in 2025. However, rental units will remain the most commonly built housing type. Condominium starts will remain low in the short term because few projects offer pre-sale units. And the proportion of units sold this way is currently low. In Ontario outside Toronto , there will be lower demand for pre-construction condominium apartments, often bought by investors, due to weaker resale and rental markets, says CMHC . This will lead to slowing of new construction in 2025. What does the future hold for the Canadian housing market? CMHC says housing starts in Canada will slow from 2025 to 2027 mainly due to fewer condos being built but total starts will remain above their 10-year average. Meanwhile, housing sales and prices are expected to rebound as lower mortgage rates and changes to mortgage rules unlock pent-up demand in the short term. In the longer term, stronger economic fundamentals such as improved job markets and income growth will support the rebound, says CMHC. Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark nationalpost.com and sign up for our daily newsletter, Posted, here.