Trapped in the Tower: Condo Owners Face Tough Choices Amid Market Slowdown

While optimism is returning to Canada’s housing market, one key segment remains stubbornly stagnant: condominiums. In major cities like Toronto and Vancouver, condo owners hoping to move up to larger homes are finding themselves in a holding pattern as sales slump, inventory rises, and prices decline.

In contrast to the improving outlook for the overall real estate market, buoyed by easing economic uncertainty and forecasts for a rebound in the second half of 2025, the condo sector is showing little sign of near-term recovery.

Since 2022, condo sales have plummeted: down 75% in the Greater Toronto Area and 37% in Vancouver. At the same time, inventory levels have more than doubled, creating a supply-demand imbalance that continues to drag prices lower.

Recent reports indicate the condo market may remain weak for the foreseeable future. Canada Mortgage and Housing Corp. attributes this to near-record levels of new completions combined with tepid demand and suggests there is limited evidence for a rapid price rebound.

This environment poses a serious dilemma for condo owners looking to move into detached homes or larger spaces. Many had counted on price appreciation to fund their next purchase but the equity they expected to tap into simply isn't there.

The numbers underscore the severity of the slowdown. In Q1 2025, condo apartment sales in Toronto dropped nearly 22% year-over-year, even as new listings surged over 25%. In May, condo activity fell 25.1% compared to the same month in 2024, a sharper drop than any other housing type. Detached home sales declined by 10.6%, townhouses by 9.8%, and semi-detached homes by just 0.3%.

In Vancouver, June saw condo sales fall 16.5% year-over-year, significantly more than the 5.3% drop for detached homes. Only attached home sales saw a modest increase.

This slump is particularly painful for so-called "move-up buyers", condo owners seeking to transition into larger properties. Many are now faced with a tough choice: sell at a loss or wait indefinitely for market conditions to improve.

Some sellers are adjusting their expectations and accepting lower prices, especially if they’re highly motivated. Others are holding on, choosing to rent out their units or delay moving until the market stabilizes.

Industry experts caution that while selling first before buying is the safer financial move, it brings its own risks, including the challenge of not finding a new home in time.

Despite hopes for a broader housing recovery, there's little consensus on when the condo market will catch up. The uncertainty is leaving many prospective sellers and buyers on the sidelines, hesitant to make a move in a market still finding its footing.

For now, patience may be the best strategy but for those dreaming of more space, the wait is proving longer and more complex than expected.