Photo – (Patrick Morrell/CBC News)
Toronto condo prices are down ~25% from 2022. Sales are rising again, but experts debate if the market has truly hit bottom.
Toronto Condo Market Shows Signs of a Shift
Toronto’s condo scene feels very different right now. However, after a long slump, things are starting to move again. In fact, prices have dropped about 25% since their 2022 peak, according to real estate data. As a result, many buyers are stepping back in.
Meanwhile, the market has shifted from fast sales to longer listing times. Therefore, buyers now have more room to negotiate. Still, uncertainty remains about whether the market has truly bottomed out.
Buyers Step In as Prices Drop
Lower prices have opened doors for first-time buyers. For example, some are now entering the market at levels not seen in years. Moreover, borrowing costs have eased slightly, which helps affordability.
In addition, government programs like the First Home Savings Account and RRSP Home Buyers’ Plan are supporting new buyers. Consequently, more people are finally making a move.
For instance, one first-time buyer in downtown Toronto said prices felt similar to those from several years ago. As a result, he decided it was the right moment to purchase instead of continuing to rent.
Sales Are Rising, But Pressure Remains
Even though prices are lower, sales are picking up. Last month, condo sales rose more than 14% year-over-year. However, prices still fell by over 6% during the same period.
At the same time, listings are staying on the market much longer. For example, homes that once sold in under two weeks may now take four to six months. Therefore, sellers face tougher conditions.
Still, experts note growing activity. In fact, some buyers had been waiting on the sidelines for affordability to improve. Now, they are slowly returning.
Investors Step Back as Developers Slow Down
Meanwhile, investor activity has dropped sharply. As a result, developers are adjusting their strategies.
In addition, several condo projects have been cancelled recently due to weak pre-sales. Therefore, new supply is shrinking.
For example, some developers are now building fewer units and focusing more on larger layouts like one- and two-bedroom suites. However, studios still remain part of the mix for students and young professionals.
Cautious Optimism for the Future
Despite current challenges, there is still optimism in the market. For instance, experts believe existing supply will eventually be absorbed.
Moreover, lower borrowing costs and improved affordability could support further recovery. However, competition among buyers may push prices higher again.
At the same time, housing construction has slowed. Therefore, future supply may remain tight.
Still, developers and analysts agree on one point: the market is changing. In fact, it is becoming more focused on end users rather than investors.
So, Has the Market Hit Bottom?
Overall, the answer is not clear yet. On one hand, prices are down sharply and inventory is higher. On the other hand, sales are improving and buyers are returning.
Therefore, the market may be stabilizing rather than fully bottoming out. Ultimately, the next few months will show whether this recovery continues or stalls again.
