Posthaste: Just when you thought Toronto’s condo market couldn’t get any worse …

Condo sales in the Greater Toronto Area last year hit their lowest level since the Global Financial Crisis. Photo by National Post

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All is not well in condo land and hasn’t been for a while.

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Condo sales in the Greater Toronto Area last year hit their lowest level since the Global Financial Crisis amid a glut of supply and slowing demand.

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They now predict that by the end of 2025 condo prices will have dropped 15 to 20 per cent from their peak in the third quarter of 2023, with about 10 percentage points of that decline taking place this year.

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The forecast wipes out much of the gain condos made during the pandemic boom, but not all. TD expects prices to remain 5 to 10 percentage points above their pre-pandemic level even after the correction.

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Challenges facing condominiums include slowing population growth as the federal government tightens immigration, along with growing supply.

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The condo market is about 75 per cent investor-driven and rents for units are falling. Rent for the average one-bedroom apartment in the GTA was down 5 per cent year over year in the fourth quarter of 2024, said TD.

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“Souring rent growth is likely turning off investors, with industry data suggesting that the share of homes being bought up these buyers is on the decline,” said TD economist Rishi Sondhi.

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Toronto home sales plunged 23 per cent in April from the year before, as buyers, wary of an economic downturn, held off making major financial commitments. The biggest drop of all housing types was the 30 per cent plunge in condo sales.

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2026 could bring a turnaround of sorts. TD expects the Bank of Canada to cut interest rates to 2.25 per cent this year, offering more relief to borrowers. Trade tensions should also ease, boosting buyer confidence.

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The pullback in condo construction which started in the second half of 2024 could lighten supply pressures, said Sondhi. TD expects condo completions to fall below recent averages next year.

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But even though “GTA condo market should enjoy a firmer year in 2026, chances of a heroic rebound appear slim,” said Sondhi.

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Trump’s tariff war could well leave “scaring on the psyche of households and businesses,” resulting in only a gradual and moderate return to hiring and economic activity, he said.

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Population growth is also likely to remain lower, which will curb rents and the attractiveness of condos as investment assets.

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“Finally, condo affordability is likely to remain strained next year, weighing on the scale of any potential bounce back in sales and prices,” said Sondhi.

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National Bank of Canada

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New trade data confirms what airline ticket sales have been showing for weeks, say National Bank of Canada economists Jocelyn Paquet and Kyle Dahms — more travellers are shunning the United States.