Standing inventory fell 7% from Q2, the first quarterly decline in four years, but it remains 40% higher than a year ago
Investment groups are buying new condos in the Greater Toronto Hamilton Area at a time when end users largely aren’t. That demand pushed new condo apartment sales to 760 units in the third quarter, twice the total from a year earlier, according to Urbanation Inc.’s Q3-2026 Condominium Market Survey.
It was the second straight quarterly gain. In Q2, Urbanation’s second-quarter survey flagged HST relief and bulk buying as the drivers of the turn.
Over the past two quarters, 1,531 units have sold, close to the 1,578 units sold in all of 2025. Q3 activity was still 78% below the 10-year average for third quarters.
Bulk deals accounted for 339 units, or 45% of the quarter’s sales. They closed at an average of $763 psf, about 40% below the original selling prices in the same buildings.
Completed buildings produced a record 648 sales, an 85% share. Standing inventory fell 7% from Q2 to 5,127 units, the first quarterly decline in four years, but it remains 40% higher than a year ago.
Dan Eisner, founder and CEO of True North Mortgage, told Canadian Mortgage Professional earlier this year that investors would signal the Toronto condo market’s bottom.
"If you can find a quality condo which is 750 square feet-plus, then you’re probably good. That’s where investors are going to move first – into those markets where [condos] are livable and the layout makes sense," he said.
"If you see those properties starting to get picked up, then you know that you’re getting close to the bottom because that’s where the investors will come first."
Presales stay frozen
Pre-construction sales fell 61% from a year earlier to 60 units. Ontario’s enhanced HST rebate requires units bought as rentals to be substantially completed by Dec. 31, 2029. Most high-rise projects take four to five years to build, so they cannot meet that deadline.
At MortgageFest Canada, Christine Xu, founder of Money Broker Canada, described what has happened to presale investors.
“Big shot realtors who bought so many pre-construction condos and now — bankruptcy. We see bankruptcy all over the place,” she said.
She also sees an opening: “For people who actually need to buy real estate for their own use, I think that’s really the best time to get into the market.”
Daniel Grechi, partner at Grechi Carter Real Estate Lawyers, said the distress is showing up in his firm’s work.
“For us, the really interesting thing has been how the enforcement side of things is growing — with the way the market’s been, there’s a real need for that,” he noted.
Stéfane Marion, chief economist at National Bank of Canada, says Ottawa should allow foreign buyers to purchase new-build homes, pointing to unsold condo inventory and the government's goal of making Canada more attractive to investors. https://t.co/hUVWtFthRu
— Canadian Mortgage Professional Magazine (@CMPmagazine) October 20, 2026
A thinning pipeline
Construction starts totalled 381 units in Q3. Year-to-date starts are 82% below the 10-year average. Units under construction fell 38% to 35,920, the lowest level since early 2012, and scheduled completions drop to 4,213 units in 2029.
Shaun Hildebrand, president of Urbanation, warned that “with the pre-construction market remaining dormant and construction starts at historic lows, the supply pipeline is drying up, setting the market up for a significant shortage by the end of the decade.”
Eisner has made the same argument by warning that, “As no new condos are being built, that spells almost certain disaster for condo pricing.”
Once today’s inventory is absorbed, he said, buyers could face sharply higher prices.
Moves such as Jesta Group’s $500m bet on unsold Toronto inventory show where capital is going for now.
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