A tale of two condo markets continues to unfold in Toronto and Vancouver, with the former seeing steeper price declines.
Brendon Ogmundson, chief economist with the BC Real Estate Association, points to CREA data that shows “wild divergence” between Toronto and Vancouver’s apartment prices since a convergence in 2022, with Toronto’s prices down about 20 per cent, while Vancouver’s are just slightly off from the peak.
“There must be a much bigger amount of excess supply in Toronto than Vancouver,” he told Real Estate Magazine. “It’s much worse in Toronto.”
What’s happening in Vancouver
Ogmundson noted that although Vancouver has seen a lot of construction over the past five years, many of those units are still in progress or intended as rentals, so supply hasn’t flooded the market all at once.
He expects some downward pressure on Vancouver prices soon as inventory accumulates and demand softens, though likely not to the same extent as in Toronto.
Toronto’s sudden downturn
“Vancouver is very much lagging Toronto,” said realtor Jarrod Armstrong with Right At Home Realty, noting that Toronto hit a peak in 2022 and the entire industry has been “flipped upside down” since then.
Armstrong said Toronto, where he is based, has been hit by a volley of changes in the last three years, like higher interest rates, a ban on foreign buyers, changes to Airbnb rules, and vacant home taxes, which have all sent investors fleeing.
“A lot has really hit the market all at once,” he said. “It’s really a perfect storm hitting the Toronto condo market.”
Armstrong said Toronto overbuilt small 350- to 450-square-feet condos mainly geared toward investors, but that are not so attractive to other buyers. That has resulted in a surplus of inventory and weak demand, which has sent prices falling.
“(Small condos) have literally lost a quarter of their value,” he said. “They’re really just unsellable.”
Armstrong said that in a given month, there might be 3,000 condos for sale but only 300 sales. The city is now seeing a fall in preconstruction sales and projects abandoned left and right, according to Armstrong.
To add insult to injury, tariffs from the U.S. have injected uncertainty into the economy that has “ruined” the spring condo market, he said.
Vancouver: Smaller scale, similar issues
In Vancouver, realtor Ron Parpara with eXp Realty told REM that he thinks the main reason prices have fared better there than in Toronto is that it is a smaller city. That means there’s less space to build and less stock to outweigh demand.
That said, he noted that the city is still feeling a market slowdown and there has been some dip in prices.
“We’re in a similar situation, just maybe in a little bit of a smaller scale with Toronto,” he said. “Sales are not keeping up with the supply.”
Parpara said Vancouver has the highest inventory in the last 11 years and there’s more coming online, and they just had the slowest May in the last 20 years. Vancouver has taken similar steps against investors as Toronto, including a vacant home tax and an Airbnb tax, according to Parpara.
As a result, he said about 90 per cent of his transactions now are end users, not investors.
Looking ahead
So what’s in store for the rest of 2025? Ogmundson predicts that in the short-term, sales will continue to be weak in Toronto and Vancouver due to economic uncertainty and a growing inventory, but there could still be a rebound eventually, given an ongoing housing shortage.
Parpara thinks prices in Vancouver will continue to fall, but there will be a more balanced market in 2026/27 as interest rates come down, while Armstrong agrees that prices will continue to lower in Toronto and it won’t be until 2027 that we see a real change. That’s when there will begin to be constraints on inventory due to a slowdown in new construction.
“I don’t think we’ve hit bottom,” Armstrong said.
Eric Stober | Jun 27, 2025
source: realestatemagazine.ca
