Back in the late 1980s to mid 1990s, the condo market in the Greater Toronto Area underwent a crash so severe that it took seven years before prices began to turn around.

Today the city’s current condo correction is on course — if not to match that record-breaking meltdown — to at least come close, says TD Economics’ Rishi Sondhi.

Now entering its fourth year, Toronto’s condo downturn is showing no sign of abating. In the first quarter, benchmark condo prices dropped 10 per cent from the year before, the biggest plunge yet since the decline started in 2023.

Condo sales were down 11 per cent from the year before and about 40 per cent below the 10-year average as the headwinds that have dogged the sector continue: too much supply and too little demand.

Sondhi said demand is likely to remain weak this year as economic uncertainty drags on, job growth lags and potential buyers struggle under the high cost of living.

With prices still falling, buyers are less likely to jump into the market if they expect even better deals to come.

Ontario’s population is also decreasing, which lowers demand for rental properties and reduces the rents landlords can charge, driving investors from the sector.

Nor is this about to change anytime soon. Even though condo completions have fallen off, stalling sales have slowed the absorption of inventory, meaning that supply will remain elevated this year, he said.

Condo prices are expected to drop six to seven per cent this year and up to three per cent next before the turnaround takes hold, said TD.

“Putting all the pieces together, it will likely take until 2028 before condo prices trend higher in earnest,” said Sondhi.

That would put the duration of the current correction at almost six years — “somewhat shy of the ’80s-’90s meltdown.”

But the drop in prices — which will be up to 30 per cent peak-to-trough — is in line with that earlier record crash.

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Canada has lost 112,000 jobs so far in 2026, the worst start to a year since 2009, outside of the pandemic.

Details from April’s data are also concerning, said National Bank economists, because all of the job losses were full-time and in the private sector. The weakness is widespread with 10 out of 16 sectors posting declines, “again the worst breadth since 2009.”

“For the Bank of Canada, not sure we can be any more direct, but it’s incredibly tough to see the logic behind the market’s pricing of more than one rate hike later this year, when the economy is struggling mightily to take even one step forward,” said BMO Capital Markets chief economist Douglas Porter in a note after the latest data came out Friday.

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Read the latest on Canada’s job market Canadian household wealth hit a new collective high of $18.59 trillion at the end of 2025, bolstered by strong financial markets. Economists say future growth will likely depend on continued strength in the stock market as the housing slowdown persists. The Financial Post’s Serah Louis breaks down the state of household wealth across the country and the assets that could drive — or drag down — gains in 2026. Read more

Interested in energy? The subscriber-only FP West: Energy Insider newsletter brings you exclusive reporting and in-depth analysis on one of the country’s most important sectors. Sign up here.

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McLister on mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his mortgage rate page for Canada’s lowest national mortgage rates, updated daily.

Financial Post on YouTube

Visit the Financial Post’s YouTube channel for interviews with Canada’s leading experts in business, economics, housing, the energy sector and more.

Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

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