Toronto’s apartment sales have fallen 75% since 2022, while Vancouver’s decline by 37% as of the first quarter of 2025, according to CMHC. The sharp decline is driven by a combination of higher interest rates, reduced affordability and reduced appetite for investors.
Meanwhile, inventory has surged. In Toronto, the supply in Q1 – 14 times higher than in 2022 as much as 58 months. Vancouver faces similar challenges, although fewer, but similar challenges.
Prices fall, losses rise
Toronto’s apartment resale prices have fallen 13.4% in Toronto and 2.7% in Vancouver, removing some of the double-digit gains seen during the pandemic housing boom.
For investors who purchase prefabricated sectors that expect continued growth, this has translated into a potential capital loss of up to 6% in 2024 purchases in Toronto.
CMHC said the profitability of investors in the Toronto and Vancouver apartment markets is “under pressure”, citing higher borrowing costs and the impact of stagnant price growth. Investors in Toronto have risen 24% since 2022, while investors in Vancouver have risen 29%, while rents are growing at slower rates at 15% and 12%, respectively.
With the resale value below the purchase price, it is also becoming increasingly difficult to obtain financing at the end.
One wave of cancellations
Unsold inventory also delays or derails future builds. In Toronto, 55% of pre-construction units remained unsold in the first quarter of 2025, which is only a record 56% at the end of 2024.
This is well below 70% of the pre-sale threshold lenders usually need to publish project funds.
These challenges led to a wave of cancellations, with the number of cancelled apartment units fivefold from 2022 to 2024 and 10 times more in Vancouver. While some developers pivot and rotate specially built rental projects, others have put plans on hold.
Short-term relief, long-term risk
Currently, the slowdown has brought some relief to buyers and renters. Rent adjustments, and in Canada’s two most expensive housing markets, prices ease mitigation conditions.
But such relief may come at a price.
“The apartment projects cancelled today mean less housing completions in the future,” the CMHC warned. “The relief for buyers and renters is temporary, and future housing shortages are more complicated.”
As expected improvements and demand remains lower, CMHC sees continued pressure on prices and rents in the near term. However, the long-term focus is obvious – Tady’s slowdown could deepen Canada’s structural housing shortage.
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Canadian Mortgage and Housing Company CMHC Apartment Investor Apartment Market Apartment Sales Former Real Estate Real Estate Investor
Last modified: June 10, 2025
