But in 2025, the story has changed—and it isn’t pretty.
Across Toronto and Vancouver, condo rents are falling, sales have collapsed, and developers are quietly cancelling projects. What was once marketed as the ultimate wealth-building play is leaving many Canadians stuck with units worth less than their mortgages.
The Condo Market’s Brutal Reality Check
According to CMHC, condo sales have plunged 75% in Toronto and 37% in Vancouver since 2022. Rents are softening, and pre-construction buyers are struggling to close as appraisals come in lower than their original deposits. For the first time in decades, Canadians are realizing that condos aren’t the guaranteed ticket to wealth they were once sold as.
What went wrong?
Built for Investors, Not for Living
The condo boom of the late 2010s and early 2020s wasn’t about livability—it was about scalability. Developers crammed as many micro-units as possible into glass towers, knowing most buyers were investors, not residents.
- In 1990, the median Toronto condo was 1,000 sq. ft.
- By 2020, it had shrunk to 650 sq. ft.
Bedrooms became glass cubicles, “dens” shrank to alcoves barely wider than a bookshelf, and one-wall kitchens became the norm. Flashy amenities—sky lounges, spas, rooftop skating rinks—were marketed as luxuries, but they couldn’t hide the lack of real living space.
Middle-Class Canadians Caught in the Middle
Here’s the kicker: most condo investors aren’t hedge funds or foreign corporations. StatsCan data shows the typical condo owner is a middle-aged Canadian couple who bought into the dream of passive income.
The logic seemed sound:
- Buy pre-construction.
- Rent it out to cover the mortgage.
- Sell later for a profit.
But rising interest rates, stagnant wages, and shrinking demand have shredded that playbook. Many “mom-and-pop” landlords now face negative cash flow, while resale buyers avoid cookie-cutter glass boxes at all costs.
Why No One Wants Them
The problem isn’t just financial—it’s psychological. Condos are increasingly seen as soulless, overpriced, and disconnected from real community life. Buyers want more than a shoebox in the sky with overpriced utilities and a “Juliet balcony” masquerading as outdoor space.
At the same time, affordability pressures mean most first-time buyers are stuck between two bad options: overpay for a poorly built condo, or stay locked out of ownership altogether.
What Comes Next for Condos in Canada?
Here’s where things get interesting. While condo sales stumble, purpose-built rentals are on the rise. Developers are pivoting from quick-flip condo towers to longer-term rental projects, where livability matters more than sheer unit count.
Experts also argue that Canada’s housing crisis won’t be solved by mega-condo towers at all—but by streamlining approvals for smaller, smarter developments. More townhomes, mid-rise apartments, and infill housing could give Canadians the options they actually want.
Lendworth’s Take: Crisis or Opportunity?
At Lendworth Canada, we see this moment as a turning point. Yes, condos are struggling. But every downturn resets the market—and creates opportunities for those who understand value.
- Investors: Watch for distressed condo assets and cancelled projects where financing gaps create entry points.
- Homebuyers: Focus on quality builds (pre-2018 stock often has larger layouts and better materials).
- Lenders: Rising defaults in the condo space mean private lending solutions will become even more critical.
The message is simple: Canada’s housing market isn’t collapsing—it’s recalibrating. And those who adapt to the new reality will come out stronger than ever.