In keeping with CMHC, condominium house gross sales in Toronto have fallen 75% since 2022, whereas Vancouver noticed a 37% drop as of Q1 2025. The sharp downturn has been pushed by a mix of upper rates of interest, decreased affordability, and waning investor urge for food.

In the meantime, inventories have ballooned. In Toronto, the months of provide for pre-construction condos surged to 58 months in Q1—14 occasions increased than in 2022. Vancouver is dealing with comparable, albeit much less excessive, challenges.

Falling costs, rising losses

Apartment resale costs have slipped 13.4% in Toronto and a couple of.7% in Vancouver since 2022, erasing among the double-digit beneficial properties seen in the course of the pandemic housing growth.

For traders who purchased pre-construction items anticipating continued progress, this has translated into potential capital losses of as much as 6% on 2024 purchases in Toronto, the company famous.

CMHC says profitability for traders within the Toronto and Vancouver condominium markets is “below strain,” citing the consequences of upper borrowing prices and stagnant value progress. Since 2022, investor carrying prices have risen 24% in Toronto and 29% in Vancouver, whereas rents have grown at a slower tempo—15% and 12%, respectively.

As resale values dip beneath buy costs, securing financing at closing has additionally grow to be harder.

A wave of venture cancellations

Unsold stock can also be delaying or derailing future building. In Toronto, 55% of pre-construction items remained unsold in Q1 2025—simply shy of the file 56% seen in late 2024.

That’s properly beneath the 70% pre-sale threshold lenders sometimes require to launch venture funding.

These challenges have led to a wave of cancellations, with the variety of cancelled rental items up five-fold in Toronto and 10-fold in Vancouver from 2022 to 2024. Whereas some builders have pivoted to purpose-built rental tasks, others have shelved plans completely.

Quick-term reduction, long-term danger

For now, the slowdown has introduced some reduction for patrons and renters. Rents have moderated, and costs have softened, easing situations in Canada’s two most costly housing markets.

However that reduction might come at a price.

“The condominium tasks cancelled in the present day imply fewer housing completions sooner or later,” CMHC warned. “The reduction for patrons and renters is non permanent, with future housing shortages compounded.”

With completions anticipated to stay excessive and demand nonetheless subdued, CMHC sees continued strain on costs and rents within the close to time period. However the longer-term concern is obvious—in the present day’s slowdown might deepen Canada’s structural housing scarcity down the road.

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Final modified: June 10, 2025