Greater Toronto condo owners holding out for the monetary easing cycle got some bad news last month—it didn’t matter. Toronto Regional Real Estate Board (TRREB) data shows the benchmark (typical) condo apartment price plunged lower in September. The declines aren’t softening either, instead picking up pace and making one of the largest monthly drops on record. Condo prices in the region are now forming a double-dip decline, and shedding value at one of the fastest rates on record.
Toronto Condo Prices Just Saw One of The Sharpest Monthly Drops On Record
The price of a benchmark condo apartment in Greater Toronto.
Source: CREA; TRREB; Better Dwelling.
Greater Toronto condo prices are plunging. The price of a benchmark condo fell a whopping 2% (-$13,400) to $654,300 in September, marking the fifth consecutive month lower. Those declines are also managing to get larger every month. September was the fifth largest monthly drop on record, only beat by 3 months in 2022 (June, July, and August), and January 2009. Not exactly what most expect considering one of the sharpest monetary easing cycles just kicked off.
Toronto Condo Prices Are Seeing Declines Accelerate
The 12-month change for Greater Toronto condo apartment benchmark prices.
Source: CREA; TRREB; Better Dwelling.
Condo prices aren’t looking so hot compared to 12-months ago, despite falling mortgage rates. When compared to a year ago, condo prices were 7.2% (-$50,400) lower in September. Once again, only four months have reported a lower 12-month price move, and none were outside of 2023. It’s a double-dip correction, and occurring at a very fast rate. The region hasn’t seen anything like this since the early 90s, before the modern city and board were formed.
Toronto Condo Prices Have Rolled Back Over 3 Years
Greater Toronto condo prices have been in a downtrend for just over two years. The benchmark price has fallen 16.6% (-$129,900) since hitting a record high back in April 2022. Prices haven’t been this low since October 2021, showing no progress over the past 3 years. With the trend making a sharp break lower, the odds of prices moving even lower are likely very high.
However, there’s no need to pour one out for Toronto condo speculators. Condos are still 22.8% (+$121,300) higher than they were in January 2020, which is substantial growth. It fails to meet the progress of major US investment indexes, but few end users would be considered in a tough spot. Fallout would primarily be concentrated in negative cashflow specu-lords, but even then the decines are unlikely to be critical loses. Which is good, since that demographic largely displaced end users in recent years.
Greater Toronto condo prices seem to be following a similar path to most other markets. The monetary easing cycle was anticipated to boost demand, helping to boost prices. However, when the actual easing came, it had little to no impact on the general market. At the same time, more and more sellers are appearing while rental vacancies and mortgage delinquencies climb.
I remember when I first moved to Canada and thought condo prices were unbearably high in 2012. I’m a professional that was sponsored by a company, and it was incredibly hard to move here too.
I don’t know how they lowered the bar to anyone with a pulse and think these prices can be supported. These kids are scraping for any kind of work—they can’t afford to even rent these places. I’d also be surprised if condo boards let occupancy run as high as needed if they start treating them as dorms.
Yessir. 100% right on this. Dual income professional household and we couldn’t afford our current home in Markham at today’s prices. Ditto with everyone on our street.
My nice family neighborhood is now off limits to anyone but foreign elites that knock the places down and built mini-palaces, and we only see them once every few months. Family-less neighborhoods aren’t neighborhoods, they’re places to flee when crap hits the fan in your home country.
So by the govt of Canada rules for lending, to qualify for a mortgage, you cant spend more than 33% of your pre tax family income on mortgage, property taxes and heat. Add to that the stress test that adds 2% to the mortgage payments. So for a median home in toronto, which is still $975K or so, that would require a pre tax family income of $310K to qualify? The median family income ion the GTA is 84,000, and the average is $97K. So even back to 2021, when rates were low, there was still at least a 100K income gap to the regulations.
So obviously the govt, BoC, big banks have been just ignoring these regulations, just as they did in the USA up to 2008. Now we have Trudeau shoring up the banks by transferring even more mortgages to the CHMC, the BoC is buying up impaired mortgages with Qualitative easing? So instead of saying, how did Canada end up the worst price to income ratio on earth for housing, They are actively protecting the people who made this mess and putting it back on the taxpayers.
The total unfunded Liability of the CHMC (a crown corp) is 97% of the mortgages they insure. With 2.4Tr in mortgage debt in Canada, and 60-70% of it high ratio, CHMC insured, Trudeau has likely gotten us into almost doubling our national debt when this ponzi scheme collapses? Oh and you can be sure all the banks will still need to be bailed out by the govt?
The correct path would have been to review every CHMC application individually, audit 20% for fraud, only insure primary residences, and prosecute banks that break the rules. Then when this happens, require banks to modify loans to offset the predatory lending they have practiced.
Now we’re in a bind where no one wants to rent a place without parking, so this is all working out extremely well as you may have guessed.
Perhaps letting a small group of very vocal and whiny single, middle aged men with too much time dictate the city’s transportation policy is a bad idea.
So its pretty clear that to get to this place in the GTA required gross negligence by all levels of govt, bank regulators, realtor regulators, BoC, the PM, and speculators. Even worse, instead of trying to mitigate and assess damages on the lenders, realtors, speculators, Trudeau and Freeland want taxpayers to pay for all this by insuring even more of these garbage mortgages?
Something fishy happening with the prices too.
The place I bought back in 2014 was about $260k, around the benchmark. Two-bedroom, almost 1,000 sqft. Looking at places $700k (today’s benchmark), and it’s a 1-bedroom (maybe den if you’re lucky), and it’s just 600 sqft.
Prices climbed but they’re also much smaller and have a higher chance of looking like it was designed for an AirBNB.
So, at some point realtors decided they are financial advisors. The problem is there is no audited financials so you can compare properties prices. So they pull out charts and tables with data from where ever, and claim it shows that real estate is returning 25% tax free. The reality is that RE is the worst performing asset in Canada. Between 1987 and 2024, its returned 3% per year. The last major recession in housing prices in the GTA was 1987-1993. Houses that sold in 1987 took till 2007 to get back to 1987 prices.
If you search average house price in the GTA you get 30 different sites with 30 different numbers? So if a realtor, who is basically a glorified used car sales person, is giving you advice on investing in real estate, you should run the other way.
Justin Trudeau promised to support house prices to make sure that Canadians are rich and good.
I really hope he wins again because my house is my best investment and it should be guaranteed by the government so that we are stable and can be sure of a good life.
Vote Trudeau 2025
Prices still way to high .
The faster the fall ,the fewer the buyers ,total collapse coming . Condo lack of sales will also affect the detached market as lots of house buyers need to sell condos to move up. condos are not only priced too high, strata fees are also getting too high to justify owning any condos. Note in today’s Vancouver sun. Judge orders Condo to spend $2.1mill to fix parking lot membrane after 12yr delay . It’s coming to a lot of older condos that have been avoiding repair costs
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Don’t worry a million more international “students” will help boost demand for Toronto rentals, while Canadians are forced to live in tent encampments during the winter.
Only fools spend money on condos. Buy new USA houses for less than 400k
NO!
There’s a truism in industrial design: “If you think good design on a product is expensive, just wait until you design the wrong product”.
400-600sq ft Toronto/Vancouver condos were always going to be the wrong product. Good for about two, maybe three years of living – with a good first job – right after university, then what? Gonna squeeze a partner in there with their things, a dog, an infant? We have friends in Toronto whose toddler lived in the closet for the first 3 years of their life as they tried desperately to find a bigger place they could actually afford.
These were always a stupid and inhuman design. But then that, as we’re seeing now, was never what they were intended for.
So From the peak of 782k, prices are down 19%, but are still 23% above where they were in Jan 2020? To restore any sort of affordability, since these are 600 sq foot condos we are talking about here, even the carrying costs on these needs a pretax family income of $5800/mo times 3 or $208,800 to qualify for an average condo mortgage.
The problem is with Trudeau and the big banks basically ignoring any sort of compliance in lending price to income risk management since 2016, the income gap in the GTA for a condo is $111k/y? This means that obviously the crisis is the result of just dereliction of any sort of regulation on mortgages by the feds for almost a decade now.
If we take the average house price, (median) its 967k. To afford that, you need $8500/mo to qualify under current mortgage rules, which is $306,000 per year, a 200K income gap? Now besides cutting rates, we have Freeland actively intervening to support lenders? She’s allowed longer amortizations, and increased the CHMC limits to 1.5M so speculators can refinance with govt guarantees for ‘investors’?
Now we know that ‘investors’ are the main problem in the toronto condo market buying up most of the condos since 2019, with nothing or very little down. This is a major risk for the banks who lent to them. The problem is, why are we putting taxpayers on the line for speculators who are now underwater on tens of thousands of condos?
The role of the CHMC was to mitigate risk for people to buy a home to live in, not to allow speculators to buy up huge groups of condos without any equity?
Those who buy condos for their home aside, as many on this site probably know, is the present and potential condo investors that want to rent it out awaiting price appreciation that are the key factor. Investors mostly staying away will push this down and down for a while, even if some houses go up in value.
It is the rents: once the momentum goes the other way, rents will drop or stay even, with more vacancies than before. With that being the case, there’s no way to buy a condo and not lose significant money, month after month. Therefore the condo market continues to drop overall even if sales pick up in the spring. No one really knows what is the support level for these condos. Surely investors will be looking to get back in at some point, but will that even happen in 2025? Maybe not. Without a big bounce back requiring investors, even ordinary people will tend to wait. I would figure the $600,000 average level will be breached, maybe touch $550,000.
There is no support level for condos. Increasing strata fees to unpayable levels and sudden large assessments will make some condos worthless. The contamination and fear of this happening will also devalue well maintained buildings and buyers will soon avoid any condo purchases. Its coming soon. Florida, Houston, Denver and Seattle are already having these problems.