Toronto’s condo market may face a prolonged slowdown as thousands of newly completed and under-construction units continue entering a market already struggling with weak demand.
Industry experts speaking during a recent Urban Land Institute (ULI) Toronto webinar said the Greater Toronto and Hamilton Area (GTHA) condo market remains under significant pressure from elevated inventory levels, affordability challenges, and reduced investor activity.
While some experts believe the market could stabilize within a few years, most agree the current correction is far from over.
Condo Sales Have Fallen Dramatically
According to data presented during the webinar, demand for new condominium units remains exceptionally weak.
The GTHA recorded just 285 condo sales during the first quarter of 2026, compared to 1,094 townhome sales during the same period.
Industry experts say higher interest rates and worsening affordability have dramatically reduced the investor demand that fueled much of Toronto’s condo boom over the past two decades.
Carl Gomez, Chief Economist at Centurion Asset Management, said much of the market’s previous growth was supported by low borrowing costs and speculative investment activity.
As interest rates increased, many investors were no longer able or willing to purchase additional units.
Thousands Of Units Are Still Coming
Despite weaker demand, a large pipeline of housing is still scheduled for completion.
According to data presented by Zonda Urban, approximately 25,869 condo and purpose-built rental units are expected to be completed across the GTHA in 2026.
Additional completions are expected in the years ahead:
- 2027: 23,170 units
- 2028: 16,162 units
- 2029: 4,255 units
- 2030: 2,135 units
This continuing supply is expected to make it difficult for the market to quickly absorb existing inventory.
Condo Cancellations Continue To Rise
The slowdown has already resulted in a growing number of cancelled projects.
More than 1,700 condo units have been cancelled so far in 2026, following more than 4,100 cancellations in 2025.
According to webinar participants, many cancelled projects have either been converted to rental housing, entered receivership, or remain uncertain.
Developers continue to face challenges securing financing because most lenders require substantial pre-sales before construction can begin.
End Users May Replace Investors
One of the biggest shifts occurring in the market is the changing buyer profile.
Historically, investors accounted for a large share of pre-construction condo purchases in the GTA.
Industry veteran Hunter Milborne estimates investors represented roughly 70% of condo buyers during the market’s peak years.
Going forward, he believes the market will become increasingly dependent on end users rather than investors.
Milborne estimates future condo purchases could eventually shift to an 80% end-user market and 20% investor market.
That shift is already influencing how some developers are designing new projects, with greater emphasis on larger units and more practical layouts aimed at long-term residents.
How Long Will It Take To Clear Inventory?
One of the biggest questions facing the market is how long it will take to absorb the current inventory.
Milborne believes it could take between two and four years for the existing supply of unsold units to be absorbed.
While that may sound significant, he noted previous market downturns have recovered faster than many expected.
Still, the path forward remains uncertain.
Weak affordability, elevated borrowing costs, slower population growth, and cautious consumer sentiment continue to weigh on demand.
Some Experts See Opportunity
Despite the challenges, industry participants noted that today’s market may offer opportunities for buyers.
Inventory levels remain elevated, competition among sellers is high, and Ontario’s expanded HST rebate on qualifying new homes has improved affordability for some purchasers.
First-time buyers and end users who have been waiting on the sidelines may find themselves with more negotiating power than at any point in recent years.
For now, however, most experts agree Toronto’s condo market remains firmly in correction territory and may take several years to fully recover.
References
McLean, S. (2026, June 17). GTHA’s condo sales slump expected to continue. RENX. https://renx.ca/gtha-condo-sales-slump-expected-to-continue
Urban Land Institute Toronto. (2026). GTHA condominium market webinar. ULI Toronto. https://toronto.uli.org
Zonda Urban. (2026). Greater Toronto Area new home market data. Zonda Urban. https://www.zondaurban.com
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