Canada’s largest condo market is continuing to face mounting pressure, and a new outlook from TD Economics suggests the downturn may last much longer than many buyers and investors expected.
According to TD Economics, the Greater Toronto Area condo market is experiencing one of its weakest periods in years, with falling prices, collapsing sales activity, rising inventory, and little expectation of a meaningful recovery before 2028.
The warning is fueling growing debate about whether Toronto’s condo market is simply going through a correction – or entering a much deeper reset.
GTA Condo Prices Continue Falling
Benchmark condo prices in the GTA are now down roughly 10% year-over-year, according to market data referenced in TD’s analysis.
The decline comes after years of rapid price growth during the pandemic-era housing boom, where low interest rates and investor demand pushed condo prices sharply higher across Toronto and surrounding regions.
Now, higher borrowing costs and weaker demand are putting significant downward pressure on the market.
TD Economics expects:
- additional price declines through 2026
- a stabilization phase sometime in 2027
- no major recovery until around 2028
Condo Sales Have Slowed Sharply
Sales activity across the GTA condo segment has weakened substantially compared to previous years.
Many buyers remain cautious due to:
- high mortgage rates
- affordability concerns
- rising monthly carrying costs
- economic uncertainty
- fears that prices could continue falling
At the same time, more listings are entering the market, increasing competition among sellers.
The result is elevated inventory levels across many parts of the GTA condo market, especially in investor-heavy downtown Toronto segments.
Investor Demand Has Weakened
The GTA condo market has historically relied heavily on investors purchasing units for rental income and long-term appreciation.
But higher interest rates and softer rent growth have made many condo investments less financially attractive than they were during the ultra-low-rate environment of 2020 and 2021.
Some investors are now:
- selling units
- delaying purchases
- struggling with negative cash flow
- waiting on the sidelines for clearer market direction
This shift has added additional pressure to resale activity.
Population Growth Is No Longer Providing the Same Boost
For years, strong immigration and population growth helped support demand for Toronto condos.
However, slower population growth projections and recent federal immigration policy changes are now creating uncertainty around future housing demand growth.
Combined with a large pipeline of condo completions still expected to hit the market, some analysts believe supply-demand imbalances could continue pressuring prices over the next several years.
Comparisons to the 1990s Housing Downturn
Some analysts have begun comparing current conditions to the early 1990s housing downturn in the GTA, when home prices experienced a prolonged correction and recovery took years.
While today’s market conditions are different in many ways – including stricter lending rules and stronger banking regulations – concerns remain around affordability, investor sentiment, and excess supply.
TD’s outlook does not necessarily predict a crash identical to the 1990s, but it does suggest the condo market may face a prolonged adjustment period rather than a quick rebound.
What This Signals for Ontario’s Housing Market
The GTA condo market plays a major role in Ontario’s broader real estate landscape.
A prolonged slowdown could impact:
- investor confidence
- pre-construction activity
- rental supply
- development pipelines
- first-time buyer opportunities
- broader housing market sentiment
At the same time, lower condo prices may eventually improve affordability for some buyers who were previously priced out of the Toronto market.
For now, however, uncertainty continues to dominate the condo sector as buyers, sellers, and investors wait to see where the market heads next.
References
TD Economics. (2026). Greater Toronto Area condo market outlook.
https://economics.td.com/ca-real-estate
Toronto Regional Real Estate Board. (2026). GTA housing market statistics.
https://trreb.ca/market-data/
Canadian Real Estate Association. (2026). Housing market trends and benchmark pricing.
https://stats.crea.ca/
Statistics Canada. (2026). Population growth and immigration estimates.
https://www150.statcan.gc.ca/n1/en/type/data?text=population%20growth%20immigration
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