Are condos still a good investment? 35% of Canadians say no—up from 30% in March

Many experts predicted a rebound in real estate following the Bank of Canada's recent interest rate cuts but buyer sentiment remains surprisingly cool.  

The picture is murkier than the headlines suggest. A new Leger survey commissioned by Rates.ca reveals a shift in how Canadians view the condominium market. 35% of Canadians now believe they are no longer a good investment — A notable five-point increase from March.

Despite the shaky view of the value of condos as investments, they may be gaining importance as an easier entry point into homeownership for a new generation of young and first-time buyers.

1 in 6 Canadians still see condos as a solid investment, but 1 in 3 say that while they used to be, they no longer are.

The latest survey shows that 35% now believe condos are no longer a good investment—up from 30% in March, when the same survey was circulated for the first time. That signals that a third of Canadians see the peak days for investment condos as behind us.

Only one in six Canadians (17%) believe condos have always been a good investment, down from 22% earlier this year.  

This comes as a flood of inventory washes over the market, partly because many pre-construction buyers from a few years ago are now unable to close on their properties. 

Steven Yanni, managing broker at HouseSigma, attributes this to a fundamental supply-demand imbalance.

"Investor appetite has diminished in the current economic environment, leaving demand primarily driven by owner-occupants who typically seek larger, more functional spaces than smaller condos provide," he says.  

According to the Rates.ca survey, 15% of Canadians have never considered condos a good investment.

Between 2022 and early 2025, average resale condo prices took a major hit—dropping 13.4% in Toronto and 2.7% in Vancouver. Just two years earlier, prices in both cities had soared by over 19%.  

In general, confidence in real estate has cooled considerably, and prices are reflecting that. Earlier this year, Royal LePage predicted a modest price increase by the end of 2025. This outlook was revised to flat growth by summer and now forecasts a mere 1% increase in house prices across Canada and a 3% fall in home prices in the Greater Toronto Area by year-end compared to 2024.  

Learn more: Ask the Expert: Solutions for a flatlining condo market and new year predictions 

56% of respondents say they have no intent to buy a condo. So, who are the prospective buyers?  

While more than half of survey respondents say they would not buy a condo, the percentage of Canadians willing to purchase a condo held steady at 31% across between March and now.  

• Primary residence: The percentage of people who would buy a condo for their primary residence (21%) has stayed more or less the same.
• Investment property: The percentage of those who would buy a condo as an investment (10%) has also remained low. 

Clara Leung, real estate broker and mortgage agent at Swivel Mortgages, says confidence remains low because the two fundamentals that previously justified condo investing— “strong price appreciation and reliable rent growth” aren’t as predictable today.  

Related: Ask the Expert: With the capital gains tax hike on its way out, is this your chance to buy an investment property? 

A window of opportunity has opened for young and first-time homebuyers

For young buyers and those in expensive urban centers, condos remain the most accessible path to homeownership, even as their potential for financial appreciation has waned.  

While 13% of respondents who don’t currently own a home still aspire to buy one, a growing 30% now say they have no plans to purchase—highlighting the increasing challenges of entering the housing market.

Younger Canadians, however, appear slightly more optimistic about condos, both as a place to live and as an investment. Among those under 35, 39% express interest in buying a condo, compared to just 27% of those over 35.

Meanwhile, 61% of Canadians over 35 say they would not consider purchasing one; significantly higher than the 43% of Canadians under 35 who stated the same.  

“We’re seeing many [first-time homebuyers] come off the sidelines, especially now since they have more choices, stronger negotiating leverage, and improved affordability after multiple Bank of Canada rate cuts – not to mention some of the more recent mortgage lending rule changes to help first time home buyers,” Leung says. “Many are using this window to get into the market and to build equity.” 

Recent mortgage rule changes have boosted affordability for first-time buyers, raising the insured mortgage cap to $1.5 million and extending amortization to 30 years for new builds, reducing monthly payments. A 100% GST rebate now applies to newly built homes up to $1 million, with scaled rebates for homes up to $1.5 million.

Provinces like Ontario have added support, offering a full 8% HST rebate on new homes up to $1 million, effective October 28, 2025, bringing total savings to as much as $130,000.

This may signal a change in how developers approach new projects.  

“A lot of 2010s condos were designed for investors and lack the space and functionality that many buyers need to grow into," says Yanni.  

He expects that going forward, "developers will increasingly prioritize owner-occupied units with practical living space, better serving residential market demands."

Related: Ask the Expert: Steve Garganis on future bidding wars and why the feds should allow 40-year amortizations 

Where are condo prices losing the most value across the GTA – and by how much?

Inventory has doubled compared to pre-pandemic levels. The Toronto Regional Real Estate Board (TRREB) notes that even with fewer new listings, active listings were up at the end of Q3, reflecting a high level of standing inventory.  

While the entire condo sector has cooled, the degree of cooling varies from region to region. The table below compares the third quarter of 2025 with the same period in 2024 across the Greater Toronto Area. Halton and Peel regions have experienced double-digit drops, while Toronto's decline has been more modest.

Some of the larger declines in Halton and Peel may reflect shifting buyer preferences according to Leung. Return-to-office mandates are also creating new patterns across different markets.  

“Buyers are prioritizing transit access and shorter commutes, which puts downward pressure on markets farther from major employment areas,” she says. “We’re also seeing buyers who moved farther out during the pandemic now looking to return closer to the city.”  

Read more: Ask the Mortgage Expert: Why this could be your window of opportunity into Canadian real estate 

$400-600K priced condos are most active in Toronto

To understand who's active in the current market, it's useful to look at where most sales are happening.  

The majority of condo transactions in the city are in the $400,000 to $699,999 range, with the $500,000 to $599,999 segment making up just over 30% of total sales across March and October combined.  

Though this price point appears to be most commonly available in the market, these condos are also more accessible for first-time buyers, particularly compared to detached homes.  

As the condo market stalls, it’s the buyers who hold the power.

The real estate market has seen dramatic changes since the pandemic boom. Now, despite lower mortgage rates and reduced prices, buyers are holding out.  

“Many are still cautious about job stability and believe condo prices may edge even lower before stabilizing, especially in urban centres like Toronto where inventory is abundant, and buyers have plenty of options,” says Leung.  

To these buyers, the “bottom” doesn’t just take the former of the historically low interest rates seen during the pandemic.  

"While interest rates have declined to reasonable levels, buyers are unlikely to be waiting for 2020 lows,” says Yanni.  

Instead, “many buyers are waiting for a clearer bottom,” says Leung. “Even when they do explore, they’re often offering lower prices to account for the possibility of further short-term softening.”

Prospective buyers are also looking for more certainty around broader economic factors—such as tariffs along with job security and clearer price direction before committing.

However, this environment presents a rare opportunity. Yanni notes that increased inventory has "strengthened their negotiating position and allowed for thorough due diligence."  

For first-time homebuyers or those with stable finances, the current market allows them to purchase without the intense bidding wars of recent years. As employers continue to mandate in-office work, Yanni believes the "renewed migration toward downtown cores and central GTA municipalities will likely create distinct regional opportunities" for savvy buyers.  

For the rest who are wary of economic headwinds, the sidelines remain the preferred position.

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