Rip

In the country’s largest markets, just one kind of real estate is immune to recovery. That, natch, is the condo. RIP.

The number of new, available, unsold and unloved units is truly staggering. GTA-area builder revealed today there are 13,726 condo apartment units available – enough to satisfy current demand for about two and a half years. As mentioned here yesterday, not a single new project was started in the first quarter of 2026. That has not happened for the last 30 years.

New home sales, by the way, showed gains last month over March of 2025. Good news? Er, not exactly.

“While we recognize the progress in new home sales for March, it is important to keep in mind the historical context of these figures,” says an industry release. “March 2025 was the worst March on record with only 439 new homes sold. Although we acknowledge the improvement from last year to this March, it is important to note that the market in March 2026 continued to underperform against 10-year averages.”

Indeed. Condo sales are running 84% below the trendline. If this were a sick person, it’d be dead.

Builders are putting a lot of stock into the latest fed initiative to strip HST from the cost of a new home purchase. Some places – like Ontario – have joined in and are chopping sales taxes. Traffic at sales centres has picked up as a result, but so far it’s been single-family homes – not condos – getting the new love.

So what happened?

Why did the benchmark unit price plummet from $769,600 in February 2022 to $542,200 now? That’s a 30% haircut, when detached homes have shed about 10% less. Meanwhile there are about 6,000 new, unsold single-family homes in the area, or less than half the condo inventory. Why?

It all cones down to then buyers. And there are two groups.

First, the kids.

Condos have always been cheaper to buy and a lot easier to own. They’ve been the perfect first step on the property ladder – but a strategy that only works when you can sell for a taxless capital gain, allowing entry into a place with dirt.

No more. The average new condo price in the GTA, for example, is over $1 million, thanks largely to runaway material, land and labour costs. For that, you might as well buy a modest detached place in Bunnypatch – where you can also have chickens and take out the garbage in your undies.

Moreover, the kiddos are freaked out these days, and in no buying mood. You can glean that in the steerage section. Those facing their first serious adult financial crisis are handling it badly, thinking a minor war and an unhinged US president mean this is an age of fundamental paradigm change, societal collapse and economic reset. They’re wrong. But as yet unknowing. So the market flubs.

The other group traditionally fuelling condo construction, sales and appreciation is made up of investors. Fully half of all new units in Vancouver and the GTA over the past fifteen years were sold to people intending to rent them out, or possibly flip for a quick gain – even before closing.

That worked until it didn’t.

Everything is now wrong. Condos cost too much. Mortgage rates are too high. Rents are falling. The population is not growing. Condo fees are increasing. Capital gains have evaporated. More than 60% of all the investors who bought units in the last three years are under water – in negative cash flow, losing money with every monthly rent cheque cashed.

So, of course, they’re gone. With stock markets clocking record highs despite crazy geopolitical events and an energy shock, there are far easier places to make money. And a lot more of it.

All this has led CREA to forecast a stagnant market across Canada in 2026. Sales will be down a little from last year (which sucked) and prices at Christmas will be about where they were at New Year’s. Things could darken if the Canada-US trade talks go toxic, Trump’s war drags on for months or if oil tops $100 a barrel and stays there long enough to drive inflation and rates higher.

Dunno. Anything’s possible.

But now that construction has ceased in many areas, and projects are being shelved, it seems easy to make one prediction: when confidence returns and the buying restarts, demand will exceed supply.

Resurrection?

About the picture: ” This cat came into my life as a stray,” writes Joselph. “Found along side a road near YEG. Named Lucky as he was bound to be dinner instead of spoiled house kitty.”

Note to readers:

Yes, I know. We are down to the cat portraits now. Stand up for the Canine Nation and send your proud dog pictures on an urgent basis. The address is ‘garth@garth.ca’. Standing by.

Source: https://www.greaterfool.ca/2026/04/23/rip-4/