Toronto Condo Prices Drop 24% From Peak — More to Come?

From $800K to $625K — The Math Is Brutal

Toronto's condo market has been in freefall for four years, and the latest TRREB data makes the damage impossible to ignore. The average condo price fell from nearly $800,000 in February 2022 to just over $625,000 in February 2026 — a decline of roughly 24%. According to Canadian Mortgage Trends, history suggests the correction may not be finished.

That's not a minor market correction. That's the kind of price destruction that traps buyers who purchased at peak, wipes out equity, and triggers a cascade of financial consequences — particularly for the wave of pre-construction buyers now arriving at closing day on contracts signed years ago in a completely different market.

The condo market has become the epicentre of Ontario's housing crisis in 2026 — not because there's too little housing, but because there's too much of the wrong kind, priced at levels that no longer make sense.

28,000 Units Closing in 2026 — Many Already Underwater

Around 28,000 condo units are scheduled to complete across the GTA in 2026. The buyers who signed those contracts did so in 2021 and 2022, when the market was red-hot and pre-construction felt like a guaranteed path to profit. Many of them are now facing a brutal reality: the unit they agreed to buy at peak prices is worth significantly less today — and the bank's appraisal reflects that.

Appraisal gaps are ranging from $85,000 to $300,000, according to data from real estate lawyers tracking closing activity. That's the difference between what the buyer contracted to pay and what the lender will finance based on current market value. Someone has to bridge that gap — and it's the buyer.

Some are scrambling to arrange bridge financing. Others are walking away from their deposits. A few are facing legal action. The pre-construction model that worked for two decades — buy low, close high, profit on appreciation — has officially broken down.

Record Cancellations, Lowest New Sales Since 1991

The pain isn't limited to buyers. Developers are in crisis too. According to Urbanation's year-end 2025 Condominium Market Survey, new condo sales across the Greater Toronto Hamilton Area hit just 1,599 units in 2025 — the lowest annual total since 1991. That's a 60% drop from 2024 alone.

At the same time, 2025 saw a record 28 active condo projects cancelled, totalling 7,243 units — more than double the number of units cancelled in 2024, and well above the previous record set in 2018. Eight of those cancelled projects, representing 2,189 units, were converted to purpose-built rental. It's a small silver lining in an otherwise grim picture.

The reason developers are cancelling isn't indifference. It's math. To secure construction financing, developers typically need to pre-sell around 70% of a building. Right now, Urbanation is tracking 16 projects in Toronto that have been on the market for over a year and haven't even hit 40% sold. Without that pre-sale threshold, the money doesn't flow, and the shovels don't go in the ground.

New Construction Has Collapsed — Setting Up the Next Shortage

Here's the cruel irony embedded in this market. In Q1 of 2025, only 497 condo units started construction across the entire GTA — down 79% from a year earlier and 88% below the 10-year average. New condo sales in Q3 2025 hit just 319 units across the GTA — against a 10-year average of over 4,000 for that quarter. That's a 92% collapse in new supply activity.

Urbanation president Shaun Hildebrand has issued a stark warning: if the current trajectory holds, the GTHA could see zero new condo completions by the end of the decade. That's not a typo. The pipeline of future supply is drying up precisely when Ontario's population growth demands more housing, not less.

Storeys reported that completions are already projected to fall from current levels to 22,066 units in 2026, then down to 14,366 in 2027. The cliff is steep, and it's approaching fast.

Will Prices Fall Further?

The short answer is: possibly. The market hasn't cleared. There are still over 20,500 unsold condo units sitting on the Toronto market — representing roughly 76 months of inventory at the current pace of absorption. At today's sales rate, it would take more than six years to clear what's already built and sitting empty.

That kind of oversupply puts continued downward pressure on resale prices, even as new supply is being strangled at the source. It's a market caught between two crises: too much old inventory right now, and a coming shortage of new supply in the years ahead.

For buyers considering a condo purchase in 2026, the calculus is genuinely difficult. Prices have already fallen 24% from peak. But the closing-day crisis for pre-construction units still has months to play out, and more distressed inventory could hit the market before conditions stabilize. The bottom isn't confirmed yet — and in Toronto's condo market right now, that uncertainty is very real.