Canada's Condo Market is a Disaster (Here's what to do)

Posted on Apr 22, 2026 in

Canada’s Condo Market Has Flipped — What Sellers Need to Know Right Now

There’s no sugarcoating it—the condo market across Canada has changed dramatically. What was once one of the most competitive and fast-moving segments of real estate has now slowed to a point many haven’t seen in decades. Based on insights from one of the top condo agents in Toronto, this may be the toughest condo market in over 20 years. And while that data comes from Toronto, the reality is it translates closely to markets like Surrey and across Greater Vancouver, especially in high-density areas like Whalley where condo supply has surged.

How Bad Is the Condo Market?

By most measures, this is one of the slowest condo markets in recent history. Sales activity is low, inventory is high, and while buyers are still active, they are far more selective than before. What’s interesting is the difference in mindset:

Sellers feel the market is worse than ever
Buyers acknowledge prices may still fall—but are willing to enter if the deal makes sense

That gap in expectations is one of the biggest reasons transactions are taking longer to come together.

Pre-Sale vs Resale: A Massive Divide

One of the biggest shifts in today’s market is the gap between pre-construction and resale condos.Buyers who purchased pre-sale units during the 2021–2022 peak are now facing:

Losses of 20% to 40% in some cases
Appraisal gaps at closing
Significant financial pressure to complete purchases

This is where the most extreme pain is being felt.On the resale side, the situation is still difficult, but more manageable. Many owners who bought at the peak are down roughly 15–25% on paper, though their monthly costs may not feel as bad due to mortgage rate changes.

Why Some Sellers Are Still Moving

Even in a declining market, people are still making moves.What we’re seeing is:

Some sellers accepting losses to move forward with life decisions
Others choosing to wait, hoping the market recovers
Some selling and temporarily renting to reset their situation

In markets like Surrey, this is becoming more common as people prioritize flexibility over timing the perfect sale.

What Actually Sells in Today’s Market

This is where things get very specific.Not all condos are struggling equally. Buyers are targeting very particular types of properties:

1-bedroom plus den units (600–700 sq ft) with parking
2-bedroom, 2-bath units over 800 sq ft with parking
Well-designed layouts in established buildings (10–15 years old)

The key trend is this:

Buyers want livable space, not just investment units

That’s a major shift from previous years when investor demand drove a large portion of the market.

The Importance of Parking and Layout

Two features stand out more than ever:

Parking is now a requirement for most buyers
Functional layouts matter more than price per square foot

Units without parking or with awkward layouts are often not even considered, regardless of price. This is especially noticeable in areas like Surrey’s City Centre, where many newer developments prioritized smaller, investor-focused units.

Why Pricing Is Everything Right Now

If there’s one takeaway for sellers, it’s this:

Pricing determines everything

In today’s market:

Roughly 1 in 5 listings sells each month
If you’re not in the top 2–3 options for buyers, you won’t get offers

That means sellers need to:

Compare directly against competing listings
Think like a buyer
Price aggressively enough to stand out

Trying to “test the market” almost always leads to chasing prices down later.

Do Incentives Work?

Sellers often ask if they can avoid price reductions by offering incentives.Examples include:

Covering maintenance fees
Offering parking rentals
Providing credits at closing

These can help at the margins, but the reality is:

Price still drives 90–95% of the outcome

In many cases, simply reducing the price achieves a faster and cleaner result.

When Will the Condo Market Recover?

Right now, most major markets are sitting around 5+ months of inventory for condos, which is still elevated. The outlook suggests:

Continued price pressure in the short term
A period of flat or sideways movement
A longer-term recovery once supply is absorbed

A realistic timeline for meaningful upward pressure on prices may be several years away, potentially closer to the end of the decade.

What Buyers Are Doing Right Now

Buyers today fall into two main categories:

Investors looking for distressed opportunities
End-users entering the market for long-term ownership

What’s notable is:

There is no urgency
Buyers are selective
Well-priced properties still sell close to asking price

This creates a market where:

Good listings perform well
Everything else sits

My Take (From Surrey)

From what I’m seeing in the Surrey condo market, the same patterns are playing out locally:

Investor-driven units are struggling
Livable, well-designed units still move
Buyers are cautious but active

The biggest shift is psychological.Buyers are no longer chasing the market—they’re negotiating within it.

Key Takeaways

The condo market is one of the slowest in over 20 years
Pre-sale buyers are experiencing the largest losses
Resale owners are down but still able to transact
Buyers are focused on livability, not speculation
Pricing is the most important factor in selling
Recovery is likely years away, not months

Final Thought

Condos still play a critical role in Canada’s housing market. Despite the negativity surrounding them right now, they remain one of the most accessible entry points into homeownership.The real question going forward is whether developers will adapt—building for end-users instead of investors—or repeat the same cycle all over again.Because what happens next will shape markets like Surrey for years to come.

Written by:
Steve Karrasch PREC
Karrasch Real Properties Team
Macdonald Realty

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