Supply continued to outpace demand in the GTA’s struggling condominium market throughout much of the year, slowing sales and placing downward pressure on average price. Given sluggish homebuying activity in recent years, the lag is expected to continue until mid-2026 when absorption levels could strengthen as the market chips away at nearly two years of inventory. The transitional period is anticipated to set the stage for healthier, more balanced market conditions come 2027, in large part driven by rising consumer confidence levels.
Resale activity down sharply from peak
Resale condominium apartment and townhome activity has fallen substantially since peak levels reported in the period from January-October 2021, when unit sales for apartments approached 29,000 and close to 8,600 townhomes changed hands. In 2025, just over 18,000 condominium apartments and townhomes were sold between January and October, off year ago levels by almost 12 per cent. Average price declined once again, with values hovering at $691,308, down just over five per cent from the same period in 2024.
Four markets in the 416 area code bucked the downward trend, with apartment sales in Bridle Path-York Mills-Sunnybrook and St. Andrew-Windfields (C12) climbing 33.6 per cent (38 units, up from 31 units sold last year). Sales in Bathurst Manor-Clanton Park (C06) rose 16.3 per cent to 143, up from 123 one year ago, followed by Etobicoke West Mall-Islington City Centre West-Kingsway South (W07) with an increase of 3.9 per cent. Don Mills-Banbury (C13) rounded out the top four, with a 3.5-per-cent increase that brought condo sales in the district to 236, up from 228 one year ago.
Economic headwinds expect to persist in 2026
Lingering concerns persist heading into 2026. Uncertainty surrounding the CUSMA extension negotiations, tariff-driven economic drag, higher living costs, upcoming mortgage renewals, and employment instability—particularly in Toronto, where unemployment sits 8.9 per cent—are expected to influence the market’s trajectory early in the year.
Although a gradual thaw is underway, progress remains modest compared to the pace of household debt accumulations and rising everyday costs. Purchasers without debt and immigrants who have been here more than five years are ideally positioned to take advantage of favourable market conditions in the year ahead. The spread between new and resale has closed in the interim, now sitting at 20 per cent from a high of 40 per cent.
Buyer behavior and seller expectations
Recent cuts in overnight rates have boosted seller optimism, but expectations should be tempered, given a continued influx of listings in November. “Tire kicking” is likely to continue as another rate cut is not anticipated until early in 2026. Softer rental rates have helped prospective buyers save more substantial down payments, but purchasers are unlikely to make their moves until values are at or near bottom.
Downward pressure will continue to impact values in the near term, particularly as more buyers re-enter the market. However, once new inventory is absorbed, and the supply of resale units sits between four and six months, conditions will shift toward balance—signalling renewed momentum ahead of the next pre-construction cycle.
Over the past year, 18 condominium projects have been cancelled, and 20 are in receivership or have shifted to purpose-built rentals. Development focus has pivoted to modular one- and two-bedroom infill and purpose-built rentals. First-time buyers are expected to lead the recovery at the $400,000 to $600,000 price point, while investors will remain cautious. Parking shortages will continue to constrain demand, with some spots now selling for as much as $100,000, depending on location.
Return to work mandates in the core have helped re-energize demand for condo living, with micro units now offering some of the best entry-level value in the market.Recalibration is expected to continue in the GTA’s condominium market over the next two years. As excess supply diminishes, inventory tightens and borrowing costs stabilize, the path toward more sustainable price growth is more crystalized. Downtown employment recovery, strengthened immigration, and a narrowed affordability gap between condo and freehold properties will also support improved momentum in the years ahead.
