Canada Housing Market

Toronto’s condo market continues to struggle through one of its deepest and longest downturns in decades, with some economists warning the correction could continue for years.

A new report from TD Economics projects Greater Toronto Area condo prices may not begin a sustained recovery until 2028. The bank estimates prices could ultimately fall between 25% and 30% from their early 2022 peak before finding a bottom.

The outlook comes as buyers remain cautious, investors retreat from the market, and developers delay projects across the region.

Toronto Condo Prices Continue To Fall

According to TD Economics, GTA benchmark condo prices fell approximately 10% year-over-year during the first quarter of 2026.

The bank believes further declines are possible before the market stabilizes.

Condo prices surged during the pandemic-era housing boom, reaching record highs in early 2022. Since then, higher borrowing costs, weaker investor demand, and growing inventory have put significant downward pressure on prices.

TD now expects condo values to remain under pressure through 2027 before beginning a more sustained recovery in 2028.

Condo Sales Remain Well Below Normal Levels

Demand remains one of the biggest challenges facing Toronto’s condo market.

TD reported that first-quarter condo sales were down 11% year-over-year and approximately 40% below the historical average for that time of year.

At the same time, active listings remain elevated, giving buyers more choice and more negotiating power.

The result is a market where sellers often face longer listing periods, multiple price reductions, and fewer competing offers.

Investors Are Pulling Back

For years, investors played a major role in Toronto’s condo market.

However, many investors are now facing a different reality.

Higher mortgage payments, slowing rent growth, and falling property values have made many condo investments less attractive than they were during the market’s peak.

Some investors who purchased near the top of the market are reportedly selling at substantial losses, while others are choosing to hold properties despite ongoing negative cash flow.

The pullback in investor demand is creating additional pressure on a market that was heavily reliant on investors during the pre-construction boom.

Assignment Sales Have Become Increasingly Challenging

One of the hardest-hit segments of the market has been assignment sales.

Assignment sales allow buyers to sell a pre-construction purchase agreement before taking possession of the property.

During the housing boom, assignment sales often generated significant profits for investors. Today, many assignments are selling for far less than their original purchase prices.

Industry professionals report some sellers are accepting six-figure losses in order to avoid closing on units that may be worth less than their purchase price.

The growing gap between original contract values and current market prices has made assignment transactions increasingly difficult to complete.

Developers Are Delaying New Projects

The slowdown is also affecting Toronto’s development industry.

Many condominium projects rely on strong pre-construction sales to secure financing and begin construction.

With demand weakened, developers are delaying launches, postponing construction timelines, and holding development sites longer than anticipated.

Industry groups have warned that the slowdown in new project launches could eventually reduce future housing supply, potentially creating another imbalance when demand returns.

Has The Market Reached Bottom?

Opinions remain divided on whether Toronto’s condo market has already reached its lowest point.

Some industry participants believe prices are beginning to stabilize as buyers gradually return and inventory levels improve.

Others argue that elevated supply and weak investor demand suggest further declines are possible.

For now, most data points to a market still searching for a bottom after more than four years of correction.

If TD’s forecast proves accurate, Toronto’s condo downturn could become one of the longest housing corrections on record.

References

National Post. (2026, June 19). ‘Bloodbath for sellers’: Tales from the frontlines of Toronto’s condopocalypse. Financial Post. https://financialpost.com/real-estate/toronto-condo-crash-sellers-investors-developers

Toronto Regional Real Estate Board. (2026). Market Watch: GTA housing market statistics. TRREB. https://trreb.ca

TD Economics. (2026). Toronto condo market outlook. TD Economics. https://economics.td.com