CMHC Predicts: Toronto’s Condo Market May Turn Around

Courtesy of The Globe and Mail

This week, Canada Mortgage and Housing Corporation (CMHC) released a report that brings some encouraging news for anyone watching Toronto’s preconstruction condo market.

While sales are down to a 33-year low and some buyers are even defaulting, the report suggests the worst may be behind us. Here’s what this could mean if you’re looking to buy a condo or invest in real estate.

What’s Happening in the Market?

The CMHC points out that today’s slump is more stable than Toronto’s 1990s property crash, thanks to a stronger economy and a persistent shortage of homes. Even though resale condo prices have dropped roughly 28% since early 2022 and average prices in the Toronto region hover around $690,000, demand is expected to come back as population growth and changing housing needs push the city’s housing deficit higher.

One interesting insight came from a recent Q&A where experts explained that rising land and construction costs have made condos expensive—often nearly $1,000 per square foot—contributing to the slowdown. Builders bought land expecting higher prices, and now some are struggling to adjust.

Why This Matters to You

Imagine you’re a young professional wanting to get into the Toronto condo market. The dip in prices might mean your dream home is suddenly more affordable, but you may also notice fewer new projects and cautious builders. This can create competition once the market starts to bounce back—meaning timing your purchase right is key.

You might also wonder about mortgage rates. Currently, some of the lowest available three-year fixed mortgage rates are about 3.69%, slightly better than variable rates. For buyers like you who prefer certainty in payments during uncertain times, locking in a three-year fixed rate can be a smart move.

The Generational Wealth Factor

I also want to highlight that many buyers nowadays benefit from family gifts for their down payments. A recent study showed nearly one-third of first-time buyers received help averaging $115,000—a big advantage for those with that support. If you don’t have that help, it can make the journey tougher, but not impossible. Smart planning and guidance can help you navigate the market successfully.

If you want personalized advice on navigating Toronto’s condo market or help finding mortgage options that fit your situation, reach out to me, Mr. Mortgage (Kechanth Kannan).

📞 +1 (647) 554-2718

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Let’s work together to turn market challenges into your homeownership opportunity!