For much of the past decade, condos were viewed as a fast track to profit — a place where flippers, landlords, and foreign investors could count on double-digit gains. But with borrowing costs stubbornly high and prices softening, the math no longer works.
According to new data from Rates.ca, the average Toronto condo now sells for about $655,000, while variable mortgage rates hover between 3.9% and 4.3%. Once you add condo fees, property taxes, insurance, and utilities, rental income rarely covers monthly carrying costs.
“It’s unlikely that most investors are walking away with positive cash flow,” said Victor Tran, mortgage and real estate expert at Rates.ca. “Many are cutting their losses and exiting the market.”
The Great Condo Unwind
Investors who bought at the height of the market in 2021–2022 — when rates were under 2% and bidding wars were the norm — are now selling for less than they paid. Many expected prices to keep climbing indefinitely. Instead, they’re facing a market that’s cooled sharply, where even stable rents can’t offset the higher cost of debt.
Economic uncertainty, rising unemployment, and global trade tensions have only made real estate speculation riskier. “It just doesn’t make sense for them to stay in,” Tran noted.
From Investors to End Users
The retreat of investors has created an opening for first-time buyers. With listings surging and competition cooling, power has shifted firmly to the buyer’s side.
“For young buyers who can qualify, this is the most attainable market we’ve seen in years,” Tran said. A condo buyer putting 15% down on $655,000 faces payments of roughly $2,900/month — nearly identical to the average rent for a two-bedroom apartment in the GTA.
“Lower prices mean smaller down payments and more flexibility in how buyers structure their mortgage,” Tran added.
Gone are the days of frantic bidding wars and unconditional offers. Today, buyers can negotiate, include financing clauses, and even request home inspections — protections that were nearly impossible to secure during the boom.
Resale Condos Rise as Pre-Construction Stalls
While resale units are attracting cautious first-time buyers, the pre-construction market remains risky. Delays, rising build costs, and project cancellations have left many investors trapped in limbo. Tran advises that “buyers stick to existing condos where the numbers are clear and occupancy is immediate.”
Renewals Loom Large
But even as first-time buyers get a rare break, the broader affordability crisis remains. A record wave of mortgage renewals is approaching, and many homeowners face payment shocks as rates double or even triple from their original terms.
“There’s a record number of Canadians coming up for renewals this year and next,” Tran warned. “That will keep pressure on prices and keep listings high for some time.”
💡 Lendworth Insight:
As investors exit and first-time buyers cautiously re-enter, Toronto’s condo landscape is resetting — from speculative profit to practical ownership.
At Lendworth, we see this as a pivotal shift: a return to fundamentals where real value, equity, and affordability drive decisions — not hype.
Your equity deserves more.™
Visit lendworth.ca to explore smarter lending and investment opportunities across Canada’s evolving real estate market.