What’s Happening with Pre-Construction Condos in Toronto?
If you’ve been watching the headlines lately, you’ve probably heard that Toronto condo sales are down. But what’s really interesting is why.
As of 2025, the GTA’s pre-construction condo market has taken a back seat to a surge in purpose-built rental buildings. Developers are shifting away from building for buyers—and instead building for renters. The effects of that change will shape housing supply for the next 5 to 10 years.
Why Developers Are Favouring Rentals Over Condos for Sale
Condo sales have slowed drastically. Some quick facts:
Sales are down up to 90% compared to typical years
Investors are on pause due to high interest rates and negative cash flow
Rental demand is booming, driven by population growth and affordability issues
So, many builders are converting condo projects into rental towers. Example: A 57-storey tower at 250 Dundas St W was originally a condo. Now? It’s a rental.
The Government’s Role: GST Rebate and Mark Carney’s Push
Newly elected Prime Minister Mark Carney launched a GST rebate for first-time homebuyers on new homes under $1 million, potentially saving buyers up to $50,000.
It’s meant to help developers sell stalled pre-con units and unlock construction—but because it only applies to first-time buyers, its impact may be limited. Most pre-construction buyers have typically been investors or move-up buyers.
Still, it’s a sign that the government is trying to stimulate demand and protect long-term housing supply.
Check out my full list of recent blog posts on rebates and incentives here.
Short-Term Forecast (Next 5 Years)
In the near future:
We’ll see fewer new condos launched
More rental towers being built
A likely slowdown in overall housing completions
Even though a ton of condos are being completed in 2024–25, few are starting now—so by 2028, we could face another supply crunch.
10-Year Outlook: A Rental-Heavy Future?
Unless something changes, we’re heading toward a housing mix that’s dominated by rentals. Homeownership could become even harder to achieve, especially for first-time buyers.
That’s why planning ahead is so important. Want to buy before the gap widens? Here's how I help buyers get ahead of the curve.
What This Means for Renters, Buyers, and Landlords Right Now
Renters: There’s more inventory and prices are slightly down. It’s a good time to move or upgrade. Buyers: It’s a wait-and-watch moment—but if you find the right opportunity, jump before prices rise again. Landlords: If you’re not lowering rent to market rates, tenants will leave. Many are already upgrading to better units at the same cost.
Final Thoughts
Toronto's real estate market is shifting fast. Pre-construction sales have slowed to historic lows, and rentals are taking over. This will impact what’s available, what’s affordable, and how people live in the city for years to come.
If you want help figuring out the right move—whether you’re renting, buying, or investing—I’d love to chat.
Email me at ek.naccarato@gmail.com Follow me on Instagram for updates, listings, and honest real estate advice.
Or browse all current blog posts: https://www.katehomes.ca/blog/418368