The market may be cooling, but opportunity is heating up.

In the first quarter of 2025, nearly 1,900 pre-construction condo units were cancelled across Toronto. Another 1,400 are being converted into rentals. While these headlines may sound discouraging at first, they signal an important shift in the condo market in Toronto, one that’s creating new possibilities for both buyers and investors.

Let’s break down what’s happening, why it matters, and how you can turn this change into your advantage.

Why Are So Many Condos Being Cancelled or Converted?

According to Urbanation, eight condo projects representing 1,899 units were cancelled in Toronto alone since January. Another 1,434 units have pivoted toward rental instead of ownership.

So what’s behind this shift?

• Slower Sales: Pre-construction developers typically need to sell at least 70% of units to secure financing. With sales slowing, many aren’t hitting that benchmark.
• Profit Margins Shrinking: Rising construction costs and higher interest rates are making some projects financially unviable.
• Price Pressure: Developers can’t drop prices too far without hurting their bottom line.

Instead of cancelling entirely, some developers are switching gears offering units as rentals to meet growing demand for long-term housing.

The Big Picture: A Shifting Strategy

In total, 28 projects across the GTA and Hamilton, totaling over 5,700 units have been impacted. This includes cancellations, delays, or conversions.

While that may sound like a market slowdown, there’s another way to look at it: the condo market in Toronto is adapting.

Matt Siemiatycki, Director at the University of Toronto’s Infrastructure Institute, points out, “The condo has been king in this city for over a decade. But today, the math just doesn’t add up the same way.”

The new strategy? Shift focus toward rentals, build larger units, and serve longer-term needs. It’s a move that could help rebalance the city’s housing market.

Why This Could Be Good News for You

Let’s be real: this isn’t a crash. It’s a course correction and there’s opportunity in the change.

• Buyers: With more projects on hold and fewer competing buyers, you may find better incentives and pricing on available units.
• Investors: The rise in rental conversions shows strong rental demand. If you’re thinking long-term, rental income in Toronto remains a smart strategy.
• Renters: While many new rentals are priced above average, the city is introducing incentive programs to support new builds, which could stabilize future prices.

The key takeaway? Don’t let the headlines scare you. The condo market in Toronto may be cooling off, but it’s not shutting down, it’s realigning with real demand.

What’s Next for Toronto’s Real Estate Market?

Sales of new condos dropped to just 533 in the GTHA in Q1 2025, the lowest in nearly 30 years. Developers are pausing to reassess, and buyers are waiting for the right moment.

But as inventory gets absorbed and confidence returns, we’re likely to see a new cycle emerge. Projects that do move forward will be more thoughtfully designed, possibly larger, and tailored to end-users rather than speculators.

And with government and nonprofit involvement growing through land trusts, co-ops, and public-private incentives, Toronto could be entering a new era of smarter, more accessible housing.

Stay Ahead of the Curve

Change always brings questions, but also possibilities. Whether you’re a buyer searching for value, a seller wondering about timing, or an investor exploring the rental space, understanding these market shifts is your first advantage.

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Quick Recap

• Nearly 1,900 condos cancelled, 1,400+ converted to rentals in 2025
• Developers face higher costs, lower margins, and shifting strategies
• The condo market in Toronto is stabilizing, not crashing
• New opportunities emerging for buyers, investors, and renters
• Government incentives and smarter planning are shaping what’s next

Stay informed. Stay empowered. And when you’re ready – we’re here to help.