With prices dropping, is this a good time to buy a condo in Toronto?

Declining demand, changes in immigration and shifting economic conditions have taken their toll on the Canadian condo market. But as interest rates continue to drop and property values have adjusted, potential condo buyers are asking themselves: do I make the most of current market opportunities and buy - or do I hang tight and see what develops?

A lagging market

The 2025 Housing Market Outlook from the Canada Mortgage and Housing Corporation (CHMC) predicts that the condo market will slow, especially in urban centers where units are often purchased as an investment. The report notes that “The housing market recovery will be uneven with the condominium apartment market lagging especially in regions that depend on investor activity.”

In Toronto, for example, there’s been a 10% price decline in condo prices since 2022, with the downward trend to continue through 2025, with projections indicating a further 7.3% decrease. Likewise, Canada’s other main urban center, Vancouver, is also seeing stagnating activity in their condo market, with developers bracing for what the CMHC calls “continued weakness in demand”.  

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Why are condo sales declining?

Clara Leung, a mortgage agent with Swivel Mortgage Group and Union Capital Realty believes that oversupply is a key cause explaining the decrease in sales.

“While there has been a slight month-over-month uptick in sales since December 2024, the volume of new listings coming onto the market continues to exceed the number of transactions,” she says. “In February, according to TRREB, there were approximately 1,500 condo sales in the GTA compared to over 5,300 new listings. This has led to a build-up of inventory, with roughly six months of supply, indicating that Toronto is firmly in a buyer's market.”

Concerns about trade relations, tariffs and broader economic uncertainty also play a part in cooling sales, she adds.

“Buyers are cautious about making significant financial commitments amidst fluctuating economic conditions,” she says. “Additionally, declining condo prices—down 1.6% year-over-year—are adding to this sense of caution, even as they present opportunities for those looking to enter the market at a lower price point.”

Steve Garganis, lead mortgage planner at Mortgage Architects, says that decreased immigration numbers are also contributing to reduced demand.

“The problem for the condo market… is that immigration has finally slowed down after seeing a 500% increase over normal 200,000 annually, over each of the last five years.” 

Additionally, Garganis suggests that the 2023 Residential Property Flipping Rule (Bill C-32) which curbs speculative buying activity by taxing profits from residential properties sold within a year of purchase as business income, has also stymied sales.

Is now a good time to buy a condo in Toronto?

Interest rates in Canada have been continuously cut over the last year. This downward trend, in conjunction with lower property values, has many Canadians asking: Is it good time to buy a condo?

Leung is cautiously optimistic, emphasizing the importance of carefully weighting personal circumstances — including long-term outlook, job stability, the economic environment and overall financial readiness — before jumping into the condo market.

“The Bank of Canada has cut interest rates seven consecutive times… making it a more favorable environment for potential buyers, however it really depends on individual circumstances,” she says, adding that people who work in industries that are less susceptible to the tariffs could benefit from lower borrowing costs and more options in the market.

“Additionally, given the current buyer's market dynamics, you also have the advantage of stronger negotiating power and better protection through clauses like finance conditions and a home inspection.”

First-time homebuyers could also take advantage of the recent mortgage reforms by the federal government that would allow for 30-year amortization terms for all first-time homebuyers.

 “The condo market, in particular, remains an affordable and accessible option, especially for those who are able to invest between $450,000 and $750,000,” she says.

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Should you rent or buy?

Rents have also started inching down in markets across Canada. If you’re looking to move, and plan to purchase a home eventually, you’re probably wondering whether it makes more sense to rent (and instead invest the money you would have spent on things like closing costs and maintenance) or buy now to take advantage of lower prices and decreasing interest rates.

A wise approach to home ownership is to carefully weight your present needs with likely future considerations and financial viability.

“It's important to think long term,” advises Leung. “Purchasing a condo is a significant commitment, so you’ll need to be sure you're comfortable with the ongoing costs, including mortgage payments, property taxes and condo fees over the years.”

But for people who can afford these costs over the long term, purchasing a condo allows homeowners to build equity.

“This financial growth can help you upsize into your next home, save for retirement or even create a legacy to pass on to your children,” She adds.

Garganis likewise endorses buying over renting in the right circumstances, highlighting that homeownership can have benefits that go well beyond pure financial considerations.

“Renting is fine for seniors, retirees and for young urban professionals, as well as for some other temporary solutions,” says Garganis. “But for longer term, buy. Buying gets you more than just tax-free capital appreciation; you'll enjoy pride of ownership and a feeling of self-worth that is hard to quantify on paper.”

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