Toronto real estate is finding out it’s not invincible, after all. New Equifax data reveals Toronto CMA’s mortgage delinquency rate surged in Q1 2025. While rising delinquencies are a national story, this is very different from the normalization seen in other Canadian markets. Over the past few years, Toronto’s delinquency rate has more than tripled and reached a multi-decade high.
Canadian Mortgage Delinquencies
We won’t bore you with a full explanation since we just did it yesterday, but we will quickly gloss over the major points worth remembering:
- Mortgage delinquency rate: the share of total mortgages that are at least 90 days past due.
- It’s about liquidity: When people can’t pay their mortgage, they sell—whether the market is good or bad. They only go into foreclosure if they can’t find a buyer, hence this is an issue of liquidity not necessarily consumer health.
- Rates vary by market: Due to differences in economic and reporting factors, every market will have a different “normal” for its delinquency rate. The velocity, or change, in the rate is more important—a quickly eroding market can indicate significant overvaluation since, once again—it’s about liquidity.
For those who want more details, check out yesterday’s piece on the national data. Got it? Now on to the data.
Toronto Mortgage Delinquencies Tripled, Highest In Over A Decade
Toronto real estate: Mortgage delinquency rate.
Source: Equifax; CMHC; Better Dwelling.
Toronto mortgage delinquencies are surging higher—much faster than the rest of the country. The delinquency rate climbed 2 basis points (bps) to 0.22% in Q1 2025, a 10% rise in the quarter. The rate is 8 bps higher than last year—equal to a 58% increase—and Toronto’s mortgage delinquency rate is the highest in at least 12 years. Unfortunately, pre-2013 data isn’t available at the city level.
Toronto’s mortgage delinquencies aren’t just unusually high—the surge has been staggering. In just two and a half years, the delinquency rate more than tripled (3.67x) from the record low in Q3 2022. While other markets have seen an increase, none have seen such a rapid one—most major cities still remain below the national average.
The rising delinquencies are just one of the compounding issues materializing in Toronto real estate. After a nearly 26-year run where the market seemed invincible, there’s been a sudden shift with sales plunging to multi-decade lows for both new construction and existing homes. At the same time, the market has the most inventory on record—yet prices remain lofty. It’s not exactly a mystery why the region has seen delinquency rates rise significantly faster than the national rate and other major cities.
Not surprising. Even with the international students the vacancy rates were rising really aggressively.
People are moving onto greener pastures, and us old timers around for the 90s correction warned that pushing it to this point and the insane governments were going to put the city back another 20 years.
Can’t even let client’s investment properties with no parking. I don’t know who the genius is that wanted 20 stories and 8 parking spots.
Toronto City Council…
Agree, when I check new developments, it is usually Les than half in parking spaces, crazy.
The sMe peopke who said we would be fine withput cars, and without ff powered heat and electricity by 2030? Every politician in central canada.
Its a complete mess, and all these tiny cubicals are soon to be worthless.
The feds and banks made this mess. as noted the devastation of the 89 crash took almost 20y for prices to recover. Most houses sold for more in 1987/88 than in 2006!
The main issue is that using monetary expansion tp cover up long term systemic economic decline ends in only one way. Banks can create trillions in new money, but rising wages immediately hot cpi, particularly in canada’s unorthodox cpi methodology.
So if rates remain rougbly the same over 25y, and wagesbare flat, eventually we run out of room for expansion. People dont have the money tp maks the payments even with ever increasing housing prices.
The problem is the govt is noy paying attention. The misuse of chmc and othdf govt bodies to fund a ‘supply’ shift us now going to cause all of us a major problem. So far carney and co seems oblivipus to the class 6 hurricane that is forming.
We need someone who can stop throwing money away, and start to reign in spending. So far carjey is worse than trudeau?
Downtown foot traffic 40% below winter 2019. I didn’t know the speed reduction and bike lanes for “vision zero” meant they wanted to see zero people downtown. Getting closer!
https://www.theglobeandmail.com/business/article-canada-downtown-foot-traffic-slow-post-pandemic/
EVERY REAL ESTATE MARKET ACROSS CANADA IS VULNERABLE.
INVESTORS HAVE GONE TO THE USA WHERE THEY CAN BUY NEW LUXURY USA HOUSES FOR LESS THAN 400K AND RESALE HOMES FOR FAR CHEAPER.