More Canadians have turned against condominiums as a good investment and that could open the door for some younger homebuyers to gain a toehold in the

housing market . A rising number of people — 35 per cent in November versus 30 per cent in March — said condominiums used to be a good investment, but aren’t anymore, according to a poll by Léger conducted for Rates.ca Group Ltd., a comparison website for financial products, while 56 per cent said they

would not buy a condo for any reason. The survey of about 1,600 adults also said 38 per cent men considered condos a poor investment compared to 32 per cent of women.

The condominium market has been under strain for several years as rising interest rates increased construction and ownership costs and a glut of units and projects drove down prices.

Toronto has been at the epicentre of the condo market downturn.

Condominium apartment sales in the Greater Toronto and Hamilton Area fell to their lowest level in the third quarter since the same period in 1990, according to a recent report by Urbanation Inc., a real estate consultant. Year over year, third-quarter sales declined 54 per cent this year and plummeted 92 per cent below the 10-year moving average.

“With the new condo market on track to record its worst year for sales in three and a half decades, project cancellations have soared,” Shaun Hildebrand, president of Urbanation, said in the report.

Despite the cancelled projects, the number of unsold completed units increased 142 per cent to a record high, with the glut pulling down sales prices.

Average asking prices fell 3.5 per cent per square foot (psf) from a year ago and were down 9.6 per cent from two years ago, Urbanation said.

Prices for developer-owned condos averaged $1,199 psf in the third quarter compared with $867 for resale condos.

Investors’ profitability in the condo market has also evaporated, according to a

Canadian Mortgage and Housing Corp. report earlier this year.

But the Léger survey said there were pockets of optimism. Nearly four in 10 people under the age of 35 said they would consider buying a condo compared with 27 per cent over the age of 35 and 31 per cent overall.

“The condo market has shifted, and who is driving demand has shifted with it,” Victor Tran,

Rates.ca mortgage and real estate expert and a broker and agent, said in a release.

Tran, who is also a broker and a real estate agent, said he is noticing more interest from

first-time homebuyers in purchasing a condo. “With higher inventory, fewer bidding wars, and sellers more willing to negotiate, younger buyers now have opportunities they simply didn’t have a few years ago,” he said.

But condos might make more sense for first-time buyers, according to Royal Bank of Canada’s latest

homeownership affordability index in October, with homeownership costs as a percentage of median household income at 36.2 per cent for a condo apartment compared with 60 per cent for a single-family home.

“There is an opening (in the condo market), but there is also no rush needed to buy right now,” Hildebrand said in an email.

He said mortgage affordability is the best it’s been since late 2021, while sales of resale condos are 25 per cent below the 10-year average, both factors that would be attractive to buyers.

But Hildebrand said there is a fear that prices could keep sliding.

“In order for buyer confidence to improve, we need stronger economic conditions and less inventory pressure,” he said.

Nonetheless, Urbanation expects the condo outlook will rightsize itself over the next few years.

“The condo market has clearly become depressed as it undergoes a difficult correction following excessive growth that emerged during the COVID-19 pandemic,” Hildebrand said. “However, the lack of activity occurring today will surely lead to a lack of supply in a couple years, helping to restart the engine for the market.”

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