The Toronto Condo Market in 2024 – A Buyer’s Opportunity Amid Investor Struggles
The Toronto condo market in 2024 is facing significant headwinds. With an oversupply of listings, rising interest rates, and capital gains tax concerns, investors are increasingly under pressure. For buyers, this creates a unique opportunity to enter the market and potentially secure favorable deals. Let’s dive into the current landscape and why now might be the right time to act.
A Surge in Listings and Price Declines
In 2024, active condo listings in the Greater Toronto Area (GTA) surged by 61.5% compared to last year, reflecting an oversupply as new completions hit the market(CityNews Toronto)(Condominiums.ca). This influx of supply, combined with fewer buyers due to higher interest rates, has resulted in longer listing times and moderate price declines. Condo prices have dropped by around 2% year-over-year(CityNews Toronto). For buyers, this creates more options and negotiating power.
Investor Struggles and Over-Leveraged Sellers
The majority of condo investors in Toronto, especially those on variable-rate mortgages, are now facing negative cash flow. Over 80% of leveraged investors are losing money on their properties(Better Dwelling). This financial pressure is compounded by anticipated changes to capital gains taxes, prompting many to sell before their financial situation worsens(AI Tax Consultants). These motivated sellers are offering buyers the chance to negotiate deals in a market flooded with inventory.
The Looming Impact of Mortgage Renewals
While many homeowners secured low fixed mortgage rates, around 30%—including a significant number of investors—are approaching mortgage renewals in 2025 and 2026(Condominiums.ca)(Better Dwelling). These individuals will soon face higher refinancing costs due to elevated interest rates, driving more properties onto the market. For buyers, this is an opportunity to engage with sellers eager to avoid steep refinancing penalties.
Why This Buyer’s Market Won’t Last
Despite the current favorable conditions for buyers, experts predict that the Toronto real estate market will rebound. Toronto remains a top destination for immigrants and professionals, ensuring demand will eventually catch up with supply. Additionally, as interest rates are expected to gradually decline, more buyers could re-enter the market, potentially driving prices back up(CityNews Toronto)(Condominiums.ca).
Conclusion: Act Now While the Market Favors Buyers
For first-time homebuyers or investors, the current state of the Toronto condo market offers a rare opportunity. With oversupply, price drops, and motivated sellers, there’s a window to negotiate and secure properties at favorable terms. However, this opportunity won’t last as the market is expected to rebound. Now is the time to act before the pendulum swings back in favor of sellers.