Condominiums are becoming less desirable as an investment, a recent survey suggests, with 30 percent of Canadians saying they no longer consider condos a worthwhile purchase.
Leger conducted a survey for financial and insurance platform Rates.ca to gather Canadians’ opinions regarding condominium ownership. Only 22 percent of those polled described condos as a good investment.
The survey also found that 57 percent of respondents said they would not purchase a condo for any reason compared to 11 percent who said they would.
As this was the first time Rates.ca commissioned the survey, the organization could not provide historical data for comparison, but said there are several factors fuelling a softening condo market.
A major challenge faced by condo sellers is the surplus of units available in the market, the report found, noting that years of pre-construction sales have played a role in that supply.
“There’s an abundant inventory coming up,” mortgage agent Kevin Wong said in the report. “Although the pricing has remained steady, we’re actually seeing a decline in sales in the condo market.”
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The combination of high interest rates, lower rental rates, and low resale value cut into investment revenues, the report found. Condos are also no longer as profitable for investors due to a softer rental market, combined with increasing costs associated with property tax and maintenance fees for condo owners.
An April 25 report found that rents have been on the decline for the past six months, dipping 2.8 percent compared to 2024, Rates.ca said.
Condos remain attractive to some buyers, however. Survey results found that 45 percent of first-time homebuyers are considering condos.
Younger Canadians between the ages of 18 and 34 are more likely to purchase a condo than older Canadians, Rate.ca said. The survey also found that 24 percent of those living in cities and 23 percent of those living in suburbs were more likely to believe condos were a good investment than those from other areas.
The average condo price across Canada came in at $520,100, meaning buyers needed to have an income of $125,500 to qualify, the report said. Rates.ca said the average income fell short by $828.
However, that number varies from city-to-city, with buyers in Toronto falling $21,000 short in annual income while Vancouver home buyers are more than $40,000 short.
“Urban cores like Toronto have hit pricing points where entry seems out-of-reach for many buyers,” Wong added. He said places like Calgary and Edmonton are more attractive to investors with lower-priced properties and “landlord-friendly regulations.”
Yet, for homebuyers in Toronto, there is plenty of choice, according to the Toronto Regional Real Estate Board (TRREB). There were 6,450 condo listings in the GTA at the end of 2024, a 43 percent increase from 2023, TRREB said.
“The year-over-year increase in inventory outpaced the increase in sales, providing buyers with more choice,” the real estate board said.
The Leger survey included feedback from 1,568 participates and was conducted between March 14 and 16.
