Canadian Condo Prices Are Falling Again, Close To A Correction

Canadian condo prices have been resisting a correction, but might be ready to give in soon. CREA data shows Canadian condo prices fell for a second consecutive month in June, wiping out most of the progress made this year. Condo prices have been relatively resilient despite rising interest rates, but historically weak demand and rising inventory in key markets show this segment’s luck may soon run out.  

Canadian Condo Prices Are Once Again Falling 

Canadian condo resales are slipping lower once again. The benchmark price of a “typical” apartment fell 0.6% (-$3,100) to $529,100 in June. This represents a decline of 2.7% (-$14,600) compared to the same month last year. 

Canadian Condo Apartment Prices Are Moving Lower

The benchmark price of a typical condo apartment across Canada.

Source: CREA; Better Dwelling.

Canadian Condos May Finally Be Correcting After Avoiding Downturn 

Condo prices peaked just after interest rates were hiked, an issue observed with all segments. Prices have only dropped 9.1% (-$53,000) since the record high was hit in April 2022. Not to downplay a $53,000 loss, it’s almost equal to the after-tax pay of a median household in Canada. However, a correction is a decline of more than 10% from hitting the peak. The current decline isn’t enough to be considered a correction, never mind a crash. 

Canadian Condo Prices Abruptly Plunged Lower Again

Condos might be running out of luck soon. As stated earlier, June’s benchmark is only 2.7% lower than last year. It’s double the rate reported in May, the first month to show declines in 2024. Those two months of negative growth wiped out almost all the gains in 2024.  

Canadian Condo Prices Abruptly Decline

The annual percent change of the benchmark price of a typical condo apartment across Canada.

Source: CREA; Better Dwelling.

Despite the rapid population growth, condo apartments are generally seeing soft demand. Prices have been pushed to the point where end users can no longer afford them. As a result, investors own the majority of recently made condos. 

With soft investor demand, traditionally booming markets like Toronto have record-high inventory in a historically weak market. At the same time, these investors are also facing a bit of motivation to sell—despite record-high population growth, regions like Toronto are now seeing condo rental vacancies climb.