One segment is finding a floor — but the condo market has further to fall
New data released this week indicates parts of Toronto’s housing market are showing brighter prospects than others – and that appears to be the case in Vancouver too, with a better outlook for detached properties even as the condo market languishes.
Mortgage broker Marshall Tully told Canadian Mortgage Professional earlier this week that tiny condos remain a toxic asset in Toronto, but sees a much more promising future for the detached market and even larger, higher-quality condos.
That suggests a common trend with Vancouver, where last month Kyle Green (pictured top) – a broker based in the city – told CMP the city’s market was likely heading for a split second half of 2026, with detached properties and townhomes finding a floor despite the condo market remaining under significant pressure.
"A lot of economists were predicting that the second half of the year would be a little bit better, in particular with the detached market," Green said. "A lot of new construction for detached has fallen off a cliff as of about 12 months ago.
“So there's less new product getting completed now, and eventually the surplus supply of detached will get eaten up and then eventually should balance out the market."
That view finds some support in Vancouver's April data, released last week. Greater Vancouver Realtors (GVR) reported that detached home sales rose 14% year over year to 659 transactions, a notable bright spot in an otherwise subdued market where overall residential sales fell 2.5% annually and remained 22.9% below the 10-year seasonal average.
GVR chief economist Andrew Lis noted that detached sales had been consistently gaining on a year-over-year basis even as the multi-family segment softened, and raised the possibility that the segment could act as a bellwether for broader market sentiment.
Green was cautiously optimistic about detached and townhomes heading into the second half, though he stopped short of forecasting a recovery. "I think it'll be less concerning and the values will flatten out in the second half for detached or perhaps even townhomes – or at least will be decreasing at a slower rate," he said.
Condos face a harder road
The picture is markedly different for condos. GVR's April figures showed condo sales fell 10.7% year over year to 1,009 transactions, a stark contrast to the detached sector's relative resilience. Green's April comments anticipated exactly that divergence, and he was frank that the headwinds facing the segment were unlikely to ease quickly.
"I am still concerned for condos. I think it may continue to get worse before it gets better," he said. "There's still too much product hitting the market."
What’s more, not all of the available inventory is necessarily visible to the market. Anecdotal reports suggest developers with unsold units are listing only a fraction on the MLS to avoid signalling desperation to buyers and to prevent competing against themselves.
"I don't think that the market totally sees all of the data for how many unsold units there are," Green said. "And there's still completions that are still hitting. So I think condos will continue to decrease heading into the year."
In Toronto, Tully said a glut of sub-500-square-foot units with limited amenities is still sitting unsold, with buyers showing little appetite for that corner of the market regardless of price.
A market that rewards patience?
For buyers positioned to act, Green's view in April was that opportunities exist in Vancouver, but that they require discipline. In the condo space particularly, he said buyers were not willing to simply pay current market prices, expecting instead to acquire assets at a meaningful discount to appraised values before committing.
"If a pre-sale condo was sold for $500,000 and now an appraiser is saying it's worth $400,000, a buyer would probably say: I still need to make a cushion on it," he said. "So I would do it at $350,000 or $375,000. They still have to undercut the current values."
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