Investors are trapped in a nightmare, but buyers who actually want to live in a property are seeing plenty of potential
Investors have faced an ever-growing nightmare in Toronto’s condo market over the past year as sliding property values, appraisal issues and climbing interest rates turned what was once a surefire moneymaker into a financial disaster.
Scores of buyers who purchased prebuild condos years ago are now finding lenders aren’t willing to offer a mortgage for the agreed sale price because the value of those units has dropped – and finding another buyer to take the property off their hands isn’t exactly an easy task.
With even more inventory set to come onstream in the months ahead even with demand nosediving, the much-discussed disaster facing the city’s condo market only looks set to deepen.
But while that’s no comfort for investors who’ve been burned by the fiasco, it’s presenting an opportunity for a buyer cohort that’s suffered enormously from huge competition and skyrocketing prices in Toronto over the years: people who actually want to buy a condo to live in.
Is the crisis making it easier for buyers to afford a home?
Condo prices aren’t exactly falling off a cliff, but they fell by 3.4% in the city centre and 4.8% in the 905 areas surrounding the city compared with the same time last year.
That’s been accompanied by a similar slide in prices across other property types: detached home prices dipped by 4.2% in the 905 and 0.6% in the 416 central area, while semi-detached prices fell by a combined 2.1% (905 and 416) and townhouse prices were down 2.5% on average.
For buyers who want to live in the property and aren’t concerned with falling values in the short term, that means there’s plenty of potential to snag a deal, according to Toronto-based mortgage broker Paul Meredith (pictured top).
Karn Toor of BlueShore Financial says life doesn’t pause for economic uncertainty. With GTA and Vancouver sales falling, buyers needing to upsize are still moving forward. Long-term, he believes homeownership remains a strong investment. https://t.co/cftoAZ9l2w
— Canadian Mortgage Professional Magazine (@CMPmagazine) May 8, 2025
He told Canadian Mortgage Professional that buyers with an eye on a condo as a long-term residence were seeing opportunity at last in the city’s real estate market.
“People have to understand what their reason is for buying the property,” he said. “Are they looking for a place for their family to live, or are they looking to flip it for a quick return? If they’re looking for a place for them and their family to live, buying at current market value is not overpaying. Yes, that value may decline further or it may not – nobody knows for sure. Nobody can say that for sure.
“But if it does decline further after they buy, they still haven’t lost any money unless they’re selling during the downturn. Eventually, it will turn around. Eventually the values will come back.”
When will Toronto’s condo market begin to gather pace again?
A slew of negative headlines about Toronto’s condo market could be convincing some would-be buyers that now isn’t the time to purchase a property, but Meredith doesn’t see the current sluggish pace of sales activity lasting for long.
“Eventually it will turn, and when it turns all the potential buyers who are holding back will eventually come back in,” he said. “There’s this pent-up demand that is not going to go away, and eventually that will come back.”
Activity has cooled hugely since the COVID-19 pandemic, when rock-bottom interest rates helped spur a housing market boom in Toronto marked by intense competition, multiple bids on single properties and a huge runup in home prices.
While there’s little chance of being drawn into a bidding war into the current market – and there’s plenty of time to see a property, make a bid, and weigh up the purchase – chances are that competition will heat up again before long.
What’s more, prices will probably also begin to climb. “That’s when we’re going to start seeing multiple offers again and it will become harder to buy a property once again,” Meredith said. “So if someone’s looking to buy a place for them and their family to live, then now is a great time to buy. But if they’re looking to buy a condo to flip it at a higher return in six months – well, that’s a scary bet.”
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