If you’ve been even remotely tuned into the Toronto real estate scene lately, you already know — things aren’t looking great. But just when it seems like the market has hit bottom, new data shows it might still be falling.

A fresh report from the Canada Mortgage and Housing Corporation (CMHC) confirms what many in the industry have feared: Toronto’s condo market is in serious trouble. And it’s not just a local issue — the slowdown here (and in Vancouver) is pulling down national housing start numbers, too.

🏗️ Construction Has Slowed to a Crawl

According to CMHC, Toronto saw a 22% drop in new housing starts in May compared to last year. Vancouver wasn’t far behind with a 10% decline. Nationally, the drop looks less dramatic — only about 2% — but that’s because Toronto and Vancouver are outliers in how sharply they’ve fallen.

And guess what’s driving the slump? Condos.

Developers are losing interest fast, and so are buyers. Without enough demand or pre-construction cash flow, many builders are shelving their plans — or just not breaking ground at all.

🏘️ Too Many Condos, Not Enough Buyers

Here’s a jaw-dropper: There are now over 32,000 active residential listings in the GTA, most of them condos. That’s a record — and not in a good way. Properties are sitting for weeks, even months, longer than they used to.

The gap between supply and demand has never been wider. Sales are down, inventory is way up, and condo values across Canada fell 7% in May — tied for the biggest year-over-year drop since 2005, according to Wahi’s national housing report.

Even worse? That same steep drop happened only twice before — during the tail end of the Bank of Canada’s last interest rate hike cycle in spring 2023.

🚨 What Does This Mean?

The condo market in Toronto (and Vancouver) isn’t just “cooling off” — it’s a major drag on Canada’s entire housing market. Developers have no reason to build, buyers aren’t biting, and prices are tanking.

While it’s a painful time for investors and sellers, there could be a silver lining for those hoping to buy in — especially first-time buyers who’ve been priced out for years. But don’t expect a sudden rebound anytime soon.

Right now, all signs point to a long, slow correction. And Toronto’s once-hot condo scene? It might be frozen for a while.