Ontario’s condo market is struggling with a sharp slowdown in sales, rising inventories, and stalled projects, with experts warning that the province is facing a “glut” of units that do not align with buyer needs. The Canada Mortgage and Housing Corporation (CMHC) reports that Toronto and surrounding municipalities are experiencing a surge in unsold condos, investor distress due to falling prices, and increasing project cancellations.
Some realtors draw parallels to the late 1980s and early 1990s, when an overheated market collapsed under the weight of oversupply and unaffordable mortgages. However, analysts note today’s conditions are different. While Ontario is only expected to build about 40,000 homes in 2025 — less than half the annual rate seen in 2020 and 2021 — an estimated 37,000 completed homes currently sit unsold, many of them condominiums. This mismatch, experts say, is rooted in planning decisions and years of regulatory bottlenecks.
Scott Andison, CEO of the Ontario Home Builders Association, argues that government policies and municipal red tape have worsened the crisis. He points out that condos being completed today were planned five to seven years ago, during a push to combat urban sprawl under policies like the Places to Grow Act. Toronto’s decision to approve mostly one-bedroom or one-plus-bedroom units left families without suitable options, while retirees are increasingly choosing to stay in their homes rather than downsize.
The result has been oversaturation not only in Toronto but also in Vaughan, Mississauga, Hamilton, and Kitchener, where a surge of condo construction in the last decade has outpaced demand. Developers who launched projects when interest rates were low are now facing difficulties closing sales in a higher-rate environment. Despite September’s interest rate cut by the Bank of Canada, affordability remains a major barrier, with government fees accounting for up to 36 percent of the cost of a new home.
To adapt, some developers are converting unsold condos into purpose-built rentals, while municipalities such as Barrie have moved to cut development charges to attract buyers. The provincial government has pledged $1.6 billion for infrastructure to make more land available for housing, but experts caution the benefits may take years to materialize. Until then, Ontario’s condo market remains oversupplied, under-bought, and in urgent need of policy reforms to ease costs and stimulate demand.
