Weak Condo Market Forces Tough Choices for Buyers Moving Up

Optimism is returning to parts of Canada’s housing market, but condominium owners hoping to trade up for a larger home face difficult decisions. The condo segment shows little sign of recovery, leaving many would-be sellers caught between accepting a smaller return today or waiting for a turnaround that may not come soon.

Major urban centres such as Toronto and Vancouver have seen condo sales decline or plateau in recent years. That shift followed a surge of new developments and a sharp drop in investor demand, which together created an oversupply of units and softened prices.

In contrast, some analysts foresee a broader housing market improvement in the months ahead after the uncertainty that affected the first half of 2025—driven by trade tensions and job losses—began to ease. But for condo owners, those broader gains have not translated into immediate relief.

Sellers stuck in limbo as condo sales drop significantly

Condo owners who planned to use appreciation to fund a down payment on a house now find those plans upended. Rather than being able to sell their units at the values they expected, many face a reduced nest egg and limited options.

“They’re kind of stuck,” said Victor Tran, a mortgage and real estate expert with Rates.ca. “They hoped to bank on the appreciation of the condo in the coming years so they can pull that money out and use that as a down payment to upgrade to a larger home. But the money is just not there anymore.”

According to a recent report from the Canada Mortgage and Housing Corp., condo apartment sales have fallen by 75% in the Greater Toronto Area and 37% in the Vancouver area since 2022. Inventory levels in those regions have more than doubled, and prices have softened as a result.

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Condo market expected to stay weak as supply outpaces demand

The national housing agency warns that the condo market is likely to remain soft while new completions stay near record levels and buyer demand remains muted. Given the wider national and global economic outlook, it sees little reason to expect a quick reversal of recent price declines.

“There are certain (situations) where sellers have just decided to hit the sell button and take a loss on their condos, unfortunately, and just move on,” said Adil Dinani, a Vancouver-based agent with Royal LePage West Real Estate Services.

He noted that a lack of market liquidity is a key issue. When condo owners can’t access the equity they expected, move-up buyers can’t reallocate funds to purchase larger homes—so those transition-minded buyers remain on the sidelines.

Selling a condo in Toronto? It’s getting harder, agents say

The Toronto Regional Real Estate Board reported that condo apartment sales in the Greater Toronto Area fell 21.7% in the first quarter of this year compared with the same period in 2024. At the same time, new condo listings rose 25.2% year-over-year, increasing competition for sellers.

Condo sales were down 2.5% year-over-year last month, roughly matching the overall trend for the region. However, activity dipped more sharply earlier in the spring: condo transactions plunged 25.1% in May, a decline that outpaced other housing types. That month, detached home sales fell 10.6%, townhouses were down 9.8%, and semi-detached home sales dipped 0.3% compared with May 2024.

Toronto-area agent Vy Ngo described the condo market as “brutal,” even as transactions for other property types begin to stabilize. “I have multiple condo listings right now. It’s very difficult to sell,” said Ngo, a sales representative with Big City Realty Inc. “It will probably be trending down the rest of the year, (into) next year. It’s going to be awhile until it picks back up.”

Motivated sellers drive Vancouver condo deals

In Greater Vancouver, condo apartment sales numbered 1,040 last month, a 16.5% decline from June 2024. That year-over-year drop was steeper than the decline for detached houses, which saw a 5.3% fall, while attached-house sales actually rose 3.7%.

Dinani explained that the final sale price for many condos often comes down to how motivated the seller is. Owners ready to sell and willing to adjust expectations tend to find buyers, while those holding out for higher prices frequently face long listing periods.

“Some sellers are open-minded and are in a position where they want to sell and they’re committed to selling, and there are still buyers for those properties,” he said. “But if you’re in a position where you have your mindset stuck on a certain price or a certain expectation and the market’s not supporting it, we’re just encouraging sellers to hit the brakes and find alternatives. So they’re staying in the home long-term, renting the property out if their financial situation allows them to do so, and then revisiting it.”

With no clear bottom in sight, buyers hesitate to make their next move

Tran calls the current period “a scary time” for would-be move-up buyers. Selling a condo now carries risks, including the possibility that it could take far longer than anticipated to find a buyer at an acceptable price.

While selling first and then searching for a new home can be safer financially, that approach also carries timing risks—buyers could sell their condo and then struggle to find a suitable replacement in a reasonable window.

“A lot of people are wondering, like ‘OK, when are we going to hit the bottom, when are we going to see some recovery and confidence put back into the market, when are we going to start seeing things turn around?’ No one knows,” Tran said. “I, personally, don’t think it’s going to be any time soon.”

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