09/30/2025
Toronto Condo Market in Free Fall — Is Now the Time to Buy or Wait?
Toronto’s condo market is facing its sharpest downturn in decades. Described as in “free fall” by Housing Minister Gregor Robertson, condo prices have plunged nearly 20% since their 2022 peak, while sales volumes are 90% below the 10-year average. Listings are at all-time highs, and forced sales are stacking up amid financing defaults.
Key drivers of the downturn include:
Price-per-square-foot down 22.5% to $823.
Population loss in the GTA, with 20,000 fewer residents this year.
A 99% drop in international immigration to Ontario in Q1 2025.
Falling rents due to a wave of new completions.
Private lenders pulling back, drying up liquidity.
Housing analyst Ben Rabidoux warns that prices could remain soft through 2027 and recommends renting in the meantime. But the downturn has created a silver lining: mortgage affordability is improving. A typical dual-income household now spends just 24.3% of earnings on mortgage payments — down from 31.4% at the peak.
Buyers also benefit from new 30-year insured mortgage options, making qualifying easier. Larger units (1+den or 2-bedroom over 700 sq. ft.) are safer bets than studios, offering better long-term value.
What could spark a turnaround?
Rising incomes gradually improving affordability.
Immigration expected to rebound.
Construction slowdowns could lead to under-supply by 2027.
Possible policy shifts (e.g., easing of foreign buyer bans or taxes).
If you’re waiting for the bottom, watch for signs like: an uptick in sales volume, consecutive price-per-square-foot increases, rents stabilizing, and sale-to-list price ratios narrowing.
While spring 2026 may bring some signs of life, a full recovery likely won’t come until late 2026 or 2027. For now, buyers should remain cautious — but opportunities are on the horizon for those with patience and a long-term view.
