The never-ending battle between supply and demand is a story well-known to those in real estate. And when it comes to the condo markets in Canada’s two largest cities, scales are heavily favouring buyers. 

According to a CIBC report, Ontario and B.C. are the biggest Canadian markets “exposed” to the slowdown in condo investment— where investors typically dominate condo purchases. The sales-to-new listings ratio in both Toronto and Vancouver shows the market currently favours buyers, with the current condo supply flooding the market.

Vancouver vs. Toronto

As Chief Economist with the BC Real Estate Association, Brendon Ogmundson has his finger on the pulse when it comes to Metro Vancouver’s housing market; he’s also observant of the activity (or lack thereof) in the Greater Toronto area.

“The big difference between Vancouver and Toronto is that prices have basically not budged in Vancouver,” he explains. “Sales in Metro Vancouver have been running around about a thousand or so a month with about 5,000 or 6,000 active listings.”

That equates to about roughly five to six months’ worth of inventory, he says.

According to Greater Vancouver Realtors, the average price of an apartment in October was $757,200, a 1.6 per cent decrease over October 2023. The Toronto Regional Real Estate Board reported the average price of a condo was $694,038 last month—a year-over-year drop of 2 per cent.

“It’s maybe slightly at the lower end of what we consider balanced—if it was really oversupplied, then we would see a lot more downward pressure on prices and we’re just not seeing that at all,” Ogmundson continues. “So maybe that’s the real difference between Vancouver and Toronto: we don’t have a real over-supply of units that would put that much downward pressure on prices.”

He adds, “It’s not as bad as Toronto.”

Pricing strategies 

Carolyn Pogue, a Realtor with Royal LePage Sterling, has been helping clients buy and sell condo properties throughout Metro Vancouver for almost a decade. When on the listing side, she implements tried and true pricing strategies based on current market conditions: 

You price low with the hope you drive multiple offers, you price at fair market value anticipating a quick sale with little negotiation or you price it high with the expectation that buyers will negotiate, and it will likely take longer to sell. 

“If interest rates keep decreasing and the buyer demand gets a little bit more intense like we’ve started to see in the last month, I do feel like 2025 will be a strong market,” Pogue shares. “I do think it will still be price-sensitive though. In terms of pricing strategy, what we’re seeing more of is either fair market value or slightly higher, with buyers negotiating off that price.” 

The pre-sale dilemma 

The sales data tells a similar story; while sales are slightly down, prices aren’t going down with them. Stefan Grenier, vice president of advisory at Zonda’s closely monitors the market, resale and presale.

“There is a significant gap in the new home market between released and unsold inventory (14,096 condominium apartments in Q3-2024) and quarterly sales (1,926 in Q3-2024),” he explains. “Sales are down 38 per cent from last year and down 45 per cent from the historical average, while active listings are up 75 per cent from last year—twice as high as the historical average.”

Grenier points out, “Buyers have choice, and builders are offering significant incentives to attract buyers.”

In the Greater Toronto Area, some of these incentives have included items such as free parking spaces, mortgage assistance and reduced deposits as developers and builders face the rising costs of construction. 

“We are at a considerable risk of some of the released and unsold units being pulled from the market, which will lead to lower condo listings in the future,” Grenier continues. “When, in reality, we should be ramping up construction and incentivizing builders to build, build, build.”

Pogue noted that this year she saw real estate developers in Metro Vancouver try to entice buyers with what she calls “pretty aggressive assignment benefits.” She explains, “We’ve seen a few that are zero assignment fee, or with a small $1,000 assignment…But the biggest thing with assignments that we find is it’s always at the developer’s discretion. So, they could say there’s no assignment fee, but when the time comes and if the seller wants to potentially assign their unit, the developer, they might not allow it.”

The future of the condo market in Canada’s largest cities 

Grenier has seen encouraging trends, particularly in the re-sale market, that could carry over into 2025. “With anticipated interest rate reductions in the coming months, we expect to see buyers re-engaging, which will lead to increased sales activity initially within the re-sale segment, before extending to the new home market”, he says. “However,  bringing new condominium apartments to market will remain a significant challenge due to persistently high construction costs, fees, approval timelines and taxes.”

CIBC predicts that the condo market will continue to favour buyers into 2025 but anticipates that the surplus in inventory will eventually be absorbed. Inversely, this anticipated demand could be met with a swing back to supply issues, with pre-sale activity at a multi-decade low. 2026 and 2027 could see a continued market dis-equilibrium, with future significant upward pressure on condo prices.