📈 Who Was That Condo Built For? (and what happens next?)

A surge of housing supply has hit Canada’s biggest cities — particularly Toronto and Vancouver — but with a growing mismatch between housing products and people, tenants, home buyers, landlords, and developers are all feeling the strain.

Market fundamentals are shifting, investor math is breaking down, and now, cities and relevant stakeholders must reorient to meet how people actually live.

Rental vacancy rates have crept toward 4%, up from under 2% just a few years ago — thanks to increased supply, fewer temporary residents, and a wave of units built more for investor yield than liveability.

StatsCan data shows the average new Toronto condo is now about 40% smaller than in the late 1980s, often under 650 ft².

For years, the math worked. With climbing rents and rising values, small units were relatively easy for middle-class investors to buy and hold. A typical one-bedroom rental could cover the mortgage and most carrying costs.

Today, with steeper prices and higher interest rates, mortgage payments have nearly doubled since 2016 — leaving many new landlords $750–$1,500 in the red each month.

A clip that drew over 1.5 million views last year captured it perfectly…

And it’s not just online discourse — housing data and investor math are telling the same story…

Millennials are delaying ownership by necessity and choice — often working from home, raising kids (and pets), and needing more space, flexibility, and liveability. Optimized dollar/sq.ft. floor plans make sense on paper, but they rarely make room for laptops, strollers, and dog beds.

Since 2020, Canada’s three largest metropolitan areas have collectively lost internal migrants — especially from downtown cores — as people traded density for space and affordability.

According to Urbanation’s fresh Q2 2025 report, completed condo inventory in the Greater Toronto-Hamilton Area just surged to an all-time record of 2,478 units — a 102% jump year-over-year.

At the current pace, it would take more than five years to absorb this inventory, compared to a long-run norm of just 10–12 months. It’s a striking example of how quickly the old assumptions have flipped.

Q1 data shows advertised rents down 2–8% in markets like Vancouver (‑4.8%) and Toronto (‑1.7%). That’s nine straight months of annual rental declines — but prices still sit about 12% above pre-pandemic levels, so affordability pressures remain.

According to CMHC’s 2025 Mid-Year Rental Market Update, national vacancy rates are ticking upward, and median asking rents in older buildings are starting to catch up with newer supply — particularly in Toronto and Vancouver. While purpose-built rentals are still in short supply overall, early signs of a rebalancing are finally emerging.

Tenants aren’t necessarily feeling relief yet — but as more condos sit empty and turnover remains low, the pressure is starting to shift.

The message is clear: it’s no longer about cranking out tiny units fast — it’s about building smarter density and homes that actually work for people.

The real question isn’t just how many condos we build — it’s who we’re building for. Whether the buyer is a resident, a middle-class investor, or a global landlord, the core issue remains: do people actually want to live in these “units”?

As demographics evolve and remote work becomes the norm — cities must reimagine the variety of homes that support real lives.

This isn’t simply a question for developers or policy-makers. It matters to homeowners, tenants, planners, service providers, community leaders, and parents — anyone thinking about the long-term vibrancy, affordability, and liveability of our neighbourhoods.

Behind the data is a human story: how people want to live, work, and belong in their cities.

Over the next 6–12 months, watch for purpose-built rental projects gaining approvals, landlords rethinking their models, and whether municipalities truly follow through on mid-density reforms.

There’s more to unpack — and we will — but these early signals matter. If we get them right, they could mark the start of a smarter, more liveable era for Canadian housing.

If not? We risk mistaking patchwork policy for real progress.

Better questions, better action, better cities…
Now build. 🍁🚀

Note: This analysis reflects public data and personal observations. It’s not financial advice. Always do your own due diligence before making investment decisions.