Weak condo market means tough choices for potential move-up buyers
Condo owners hoping to buy a house are stuck in a stalled market as sales in Canada continue to slump.
Photo by Darryl Dyck / The Canadian Press
While optimism is building in some parts of Canada for a rebound in the real estate market, condominium dwellers wanting to move up to a larger space face tough choices amid little sign of improvement for that segment.
Cities like Toronto and Vancouver have seen condo sales drop off, if not stagnate, in recent years following a rush of new supply opening up and plummeting investor demand.
For some regions, that marks a divergence from the overall real estate picture. Many industry watchers are now forecasting a turnaround in the housing market in the coming months after the first half of 2025 was plagued by economic uncertainty related to tariffs and job losses.
Sellers stuck in limbo as condo sales drop significantly
It’s left those looking to leave condo life behind and upgrade to a house in a tough spot: sell now at a lower than anticipated value, or wait out the storm.
“They’re kind of stuck,” said Victor Tran, a mortgage and real estate expert for Rates.ca.
“They hoped to bank on the appreciation of the condo in the coming years so they can pull that money out and use that as a down payment to upgrade to a larger home. But the money is just not there anymore.”
Since 2022, condo apartment sales have dropped by 75% in the Greater Toronto Area and 37% in the Vancouver area, respectively, said a report last month by Canada Mortgage and Housing Corp. Meanwhile, inventories have more than doubled and prices have fallen in those regions.
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Condo market expected to stay weak as supply outpaces demand
The national housing agency said the condo market is expected to remain weak as completions “remain near record levels and demand remains subdued.” It added there is little evidence to suggest price declines will quickly reverse “given the national and global economic outlook.”
“There are certain (situations) where sellers have just decided to hit the sell button and take a loss on their condos, unfortunately, and just move on,” said Adil Dinani, a Vancouver-based real estate agent at Royal LePage West Real Estate Services.
“There’s a lack of liquidity in the condo market, so that’s preventing potential move-up buyers from reallocating that money, or buyers from moving up in the market, potentially, because their condos aren’t worth what they expected them to be worth.”
Selling a condo in Toronto? It’s getting harder, agents say
A report released by the Toronto Regional Real Estate Board in May showed condo apartment sales in the Greater Toronto Area were down 21.7% in the first quarter of this year compared with the first three months 2024. Meanwhile, new listings in the quarter were up 25.2% year-over-year for that segment.
Condo sales were down 2.5% last month on a year-over-year basis, roughly in line with overall home sales trends for the region. However, that came after activity in the condo market declined 25.1% in May—far outpacing the drop in sales for other housing types. That month, detached home sales declined 10.6%, townhouses were down 9.8%, and semi-detached homes ticked 0.3% lower from May 2024.
Toronto-area real estate agent Vy Ngo described the condo market as “brutal,” even as activity has started to stabilize when it comes to other properties. “I have multiple condo listings right now. It’s very difficult to sell,” said Ngo, a sales representative with Big City Realty Inc. “It will probably be trending down the rest of the year, (into) next year. It’s going to be awhile until it picks back up.”
Motivated sellers drive Vancouver condo deals
In Greater Vancouver, there were 1,040 sales of condo apartments last month, a 16.5% decrease compared with June 2024. That was a steeper year-over-year decline relative to sales of detached houses, which were down 5.3% from June 2024, while sales of attached houses were up 3.7%.
At the moment, Dinani said the market price for a successful condo sale is ultimately dependent on “who is the most motivated seller in the neighbourhood.”
“Some sellers are open-minded and are in a position where they want to sell and they’re committed to selling, and there are still buyers for those properties,” he said.
“But if you’re in a position where you have your mindset stuck on a certain price or a certain expectation and the market’s not supporting it, we’re just encouraging sellers to hit the brakes and find alternatives. So they’re staying in the home long-term, renting the property out if their financial situation allows them to do so, and then revisiting it.”
With no clear bottom in sight, buyers hesitate to make their next move
Tran called it a “scary time” for people looking to upgrade to a larger home due to the risks involved in selling their current property, such as the possibility that finding a buyer could take much longer than hoped.
While he said it’s safer to sell first and then make an offer on a new property to buy, that also comes with the risk of not finding a property in time to move.
“A lot of people are wondering, like ‘OK, when are we going to hit the bottom, when are we going to see some recovery and confidence put back into the market, when are we going to start seeing things turn around?’ No one knows,” said Tran.
“I, personally, don’t think it’s going to be any time soon.”
Buying a new build? You may qualify for a CMHC Eco Plus refund
CMHC Eco Plus is a new program that encourages Canadian home buyers to opt for energy efficiency. Here’s how it works, plus more programs for greener homes.
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Without exception, when you purchase a home in Canada with a down payment of less than 20%, you have to pay a CMHC insurance premium (also known as mortgage default insurance or mortgage loan insurance). It’s a federally mandated requirement, administered by the Canada Mortgage and Housing Corporation, and it serves the dual purpose of protecting lending institutions while enabling purchasers to get into the housing market sooner, with a down payment as low as 5%.
CMHC insurance premiums range from 0.6% to 4.5% of the total mortgage amount (the smaller the down payment, the higher the rate), and they are typically tacked onto the mortgage. To help take the bite out of that expense, a new sustainability initiative called CMHC Eco Plus offers a 25% partial premium refund to buyers of newly built energy-efficient homes. CMHC Eco Plus launched on July 8, 2025. Let’s look at the details and how home buyers can benefit.
Which homes qualify for CMHC Eco Plus?
To qualify for CMHC Eco Plus, a new house or condo “must meet the building standards of eligible certifications or the energy efficiency target based off the EnerGuide Rating System (ERS).” Eligible certifications include Energy Star, R-2000, LEED, Passive House and others. The full list of eligible standards is available on the CMHC’s website.
In a recent CMHC mortgage consumer survey, 61% of respondents said energy-efficient features were an important factor in their home-purchasing decision-making. The CMHC Eco Plus program aims to nudge you in the direction of choosing a more energy-efficient new home—a decision that could amount to a higher sticker price but also pay dividends in terms of long-term energy savings.
Here’s an example of how much you can save: if you purchased a new home for $500,000 with a 10% ($50,000) down payment and a 90% mortgage ($450,000), the CMHC insurance premium would be 3.1% of your loan, which is $13,950. If your home meets one of the recognized energy-efficiency standards, you can apply for the 25% CMHC Eco Plus rebate, which would be $3,487.50. (See all CMHC insurance premiums, and use MoneySense’s mortgage insurance calculator to estimate your cost.)
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How do you apply for CMHC Eco Plus?
To get a refund from CMHC Eco Plus, home buyers who have mortgage insurance must submit an application to the CMHC within two years of their mortgage’s closing date. You’ll need to provide either the final certificate from one of the eligible certification programs and/or the home’s EnerGuide label or EnerGuide Renovation Upgrade Report (RUR). Get more details from CMHC Eco Plus.
Incentives to make an existing home greener
What about Canadians who already own a home? There’s a CMHC incentive program for you, too.
As the CMHC shared in a YouTube video, “we want to make it easier for more CMHC mortgage loan insurance clients to buy, build or renovate green.” With that in mind, the organization offers those home owners the Eco Improvement initiative. If you spend at least $20,000 on energy-efficiency improvements within the program’s three categories—renewable energy systems, mechanical systems, and building envelope—then you’re eligible to apply for a 25% premium refund.
There’s also Natural Resource Canada’s Oil to Heat Pump Affordability program, which offers up to $10,000 in rebates for lower-income Canadians currently heating their homes with oil to transition to energy-efficient heat pumps.
Coming soon: Canada Greener Homes Affordability Program
Nearly 400,000 Canadian households have participated in the Canada Greener Homes Grant program, a government initiative that was mothballed in the spring of 2024 (the feds say the funds allocated for the program were depleted much sooner than anticipated). In its wake, another initiative known as the Canada Greener Homes Affordability Program is slated to launch before the end of 2025.
Although few details have been released, the National Resources Canada (NRCan) program is designed to provide low- to median-income home owners and tenants with “no-cost home retrofits, such as insulation and heat pumps.” We’ll share more details as they become available.
