The condo market has crashed and developers, despite pleas and government incentives, have not been able to kick-start new construction, leaving the city headed for a housing supply crunch in just a few years. 

One of the biggest hurdles is the need to sell a majority of the units before a shovel even hits the ground — a model unique to Canada.

For more than 30 years, lenders have required developers to sell a portion of condos before they’re built in order to obtain construction financing, with the threshold inching higher and higher to today’s standard of 80 per cent of a project’s condos being presold.

As condos take around five years to build, presales typically attract investors who bet on the value of the unit rising before closing. But with prices falling, those buyers have fled the condo space and presales have hit record lows, making that 80 per cent target near impossible for developers to hit.

Industry leaders say it doesn’t have to be this way. Most cities around the world — Paris, Tokyo and New York City, to name a few — are able to build condos without preselling them. Toronto just needs to take the first step.

The transition away from presales will be a gradual process, said Benjamin Tal, managing director and deputy chief economist at CIBC Capital Markets.

But he firmly believes that in 10 years from now, “the (condo) financing model will be very different than it is now.”

How we got here

After the 1990s real estate market crash, lenders began requiring presales for condo developers to protect themselves against financial risk. Buyer deposits acted as secured financing, ensuring there was some cash already in the project on top of a developer’s own capital.

“The presale requirement is unique to Ontario, post ‘90s. It was just a way to protect banks, to protect their risk,” said Jasmine Young, vice-president at Zonda, a U.S.-based real estate data firm with Canadian operations. 

Young said when she started in real estate in the early 2000s, the presale requirement was around 50 per cent, which would take about 12 months to meet. 

Presales would occur in a phased approach. First, developers would hold a private event for friends and family, who would be offered the biggest discount. Then there would be big catered events for brokers where the bulk of sales would happen, followed by a grand opening for the public. Penthouse sales would typically be saved for the end, Young added.

But as land costs, interest rates, construction costs and building height kept mounting, the money needed also grew, resulting in lenders seeking a greater portion of the project to be presold, Young said. 

In the mayhem of the pandemic feeding frenzy, hundreds of units would presell in just a few hours, she added, making the current 80 per cent threshold easy to reach. But now, in the condo crash, meeting that target is near impossible. 

Build first, sell later

Experts say investors aren’t expected to come back any time soon, igniting conversations about alternative financing. The model they most point to is to sell condos after they’re built.

With investors out of the picture, developers are courting end-users — buyers who want to live in the units. The problem is, they don’t buy preconstruction as on average it takes five years for a condo building to be built, and families can’t wait that long, said CIBC’s Tal. 

“The model will have to change,” he said. “I think you will see more and more developers building on spec — namely, you build and then you sell. The way it is basically in the rest of the world.” 

Pouyan Safapour, president of Toronto-based real estate developer Devron who’s been advocating for switching to the build-first model, said selling units after they’re built ensures the developer is more connected to what an end-user wants.

Typically, these buyers want bigger apartments, not the shoebox condos favoured by investors due to their lower carrying costs.

Safapour said catering to end-users’ needs means the quality of the product is more “high value” because the supply is dictated by people who want to live in the unit, not rent it out.

How to ditch presales

Transforming the condo financing model requires banks and other lenders to take on more market risk, and for developers to put more equity into the projects, Tal said.

“Banks or lenders will have to take on a bit more risk, and how much would a lender be comfortable financing? The focus will be on the well-capitalized developers, it will be from relying on deep relationships … the banks will have to make sure that they trust the project,” he said.

Kari Norman, senior economist at Desjardins, said developers could partner with institutional investors such as pension funds or real estate investment trusts (REITs), which would allow the developer to put more money upfront to satisfy lender requirements.

“Lenders don’t want to take on all the risks. So if presale condos aren’t mitigating that risk, then developers need to look at other alternatives,” she said. 

The federal government could also offer loans through the Canadian Mortgage and Housing Corp. (CMHC) as it does for purpose-built rental projects, which has been a boon for condo developers pivoting to rental. 

If CMHC guaranteed a portion of construction financing, “it could help mitigate the risk to lenders when there’s a lower share of condo presales,” Norman said, adding that in that case “I could definitely see that being reasonable to have some kind of requirement in terms of more affordable housing within that project.”

Already, developers are creating more products that people want to live in through bigger units in purpose-built rentals.

“Quite frankly, if you look at what’s happening in the condo market, it is going through a major shock,” said Tal, “and you cannot have this kind of shock without a change.”

Peter Tulip is Chief Economist at Centre for Independent Studies (Australia). Ex-RBA, ex-Fed. https://www.cis.org.au/person/peter-tulip/

Relaxing the zoning rules is a strict no-go in Toronto, almost the epicentre of Canadian state-sponsored housing ponzi scheme.

Olivia Chow's Toronto City Council and Doug Ford's PC Govt and Mark Carney's Liberal Govt will hold hands, sing Kumbaya and shed crocodile tears over affordability rather than doing one meaningful thing: Stop being such bootlickers of these Toronto Resident Associations and relax zoning rules to allow gentle density.

Toronto resident associations submit open letter opposing sixplexes

Here’s a scenario: You bought a presale home a few years ago, construction is almost complete, but the home is worth significantly less now compared to what you agreed to pay for it years ago. What do you do?

Here’s the math: You paid a $68,000 deposit. Your purchase price was $715,000, but the home is now worth closer to $585,000. Do you complete the purchase and crystallize that loss?

That’s a hard place to be in, but here’s the rock: If you walk away from the purchase, you lose your deposit, and the developer can sue you for an additional $70,000.

This is a real-world example, with numbers rounded, currently playing out in the Supreme Court of British Columbia, where Metro Vancouver developers have initiated dozens of lawsuits in recent months against individual presale purchasers, according to a review of court filings by The Globe and Mail.

The above lawsuit was initiated by Zenterra Developments against a buyer on their King & Crescent project in Surrey, B.C. They’ve also filed similar suits against buyers at The Commons, a project in Langley, B.C. But Zenterra is far from the only developer taking legal action.

Other examples of suits against buyers include Fleetwood Village 2, by Dawson + Sawyer in Surrey, Hue by Marcon in Port Moody, B.C., Towns at Lynn by Mosaic Homes in North Vancouver, and The Butterfly by Westbank in Vancouver. In many of those instances, the developer has sued multiple buyers. The Globe and Mail found two dozen separate lawsuits across just these projects.

Reached for comment, Mosaic said they have made efforts to work with buyers to support their closings and that only a small number of purchasers did not close. All of the other developers declined to comment or did not respond.

All of the lawsuits follow the same general structure: A buyer signed a presale purchase agreement a few years ago, they paid a deposit, then did not close on their purchase.

In most cases, the developers managed to resell the units, but at a much lower price due to today’s weaker market conditions, and are now suing the original buyer for breach of contract and damages stemming from the sale price difference. In several instances, developers are also claiming damages for costs associated with carrying the units, having to remarket the property and even strata fees.

The exact reasons those buyers did not complete their purchases were not stated in court documents, but the sheer volume of lawsuits and their similarities indicate that it wasn’t just a whim: there are larger market forces at play.

Mike Stewart – a Vancouver-based realtor who specializes in presales – and Craig Anderson – vice-president of sales for Magnum Projects, a marketing and sales firm – both said, independently, that the following scenario is becoming increasingly common: a buyer agreed to a presale for $700,000 a few years ago, they go to their bank to get an appraisal ahead of closing, but the bank says it’s only worth $600,000 now and that the buyer has to come up with the remaining $100,000 if they want financing.

That’s not always possible, and it may not even be worth it.

But whatever the reasons, developers are taking legal action. Although there have been previous examples of this, both Mr. Stewart and Mr. Craig say it was rare when the market was good, because developers could often resell the unit at a higher price. Times are different now.

“Developers are not messing around any more,” said Mr. Stewart. “They are going after people because their costs are so high and their losses are so high. So they need to sue people.”

“For the last two decades, they would just say, ‘Well the home was $1-million, we’re now gonna sell it for $1.1-million. And sometimes, they’d give half the deposit back, because they were looking at managing their reputation,” said Mr. Anderson. “Now, they’re willing to spend legal fees to go after people and go after them hard. You see they’re [claiming] fees, including the strata fees [the buyers] were supposed to pay and all the legal fees. They always get a little pound of flesh, but now they’re going for every dollar.”

Illustrating how much market values have fallen, Mr. Anderson said Magnum has been involved with four low-rise wood-frame projects in Surrey recently and that the market values were around $870 per square foot last year. They are now closer to $700.

Both Mr. Stewart and Mr. Anderson recognize that developers face pressures of their own, including potentially from their own lenders. Each acknowledged that they are not lawyers, but they’ve been working with presales for years and believe these kinds of lawsuits are pretty open-and-shut.

“I’m not a lawyer, but my understanding is the case law is very clear,” said Mr. Stewart. “At the end of the day, these are contracts. When one breaks a contract, there are hundreds of years of precedent. And a lot of these people are finding out.”

Reviewing some of the cases for The Globe, Mr. Anderson said he was surprised that the developers were able to resell the units at the price they got, in some instances, as the prices were above current market rates. He suspects there will be more of these lawsuits.

In the cases reviewed by The Globe, the developers are seeking court judgments against the purchasers in amounts ranging from $70,000 to $166,000. Mr. Anderson says it’s unlikely the purchasers have much legal ground to stand on and will likely be on the hook for the full amounts, barring compassion and leniency from the judge.

“This is the quiet downside of presale that nobody wants to talk about, but it’s a contract,” said Mr. Anderson. He added that Magnum has worked with several purchasers who have brought in lawyers trying to get out of their purchases. “I haven’t seen this since 2010. Everybody wants to buy presale when the market is going up, but nobody wants any part of it when it’s going down.”

Houses in our desired neighborhood of Lansing and Willowdale are not moving. 40+ days on the market. These are larger homes with outdated interiors. Whats the theory? Will prices start to decline? Most are listed at 2M.

I'm looking for some opinions on two areas I might be able to move to, any helpful advise/opinions would be appreciated! I don't normally visit these areas so I don't know many people there so just looking for general perspectives on safety/crime/family-friendliness/etc.

1. South of Colonial/McCowan Park
2. The block west of Scarborough VIllage Rec Center

On a map: https://i.imgur.com/ufvn3sC.jpeg

Thank you

What do you think ?

word to the wise.

drive and then walk around the area. its the only way you will get an idea. make the drive during what would be your commute so you know what itd be like. everyone on reddit has different opinions.

ans for budget, just ask your realtor to send you the last five homes that SOLD (not listed price) within your budget in a given area, so you can visualize how much house you can get.

Urban Toronto: https://urbantoronto.ca/forum/threads/toronto-the-vic-towns-16-52m-5s-solotex-gabriel-bodor.27600/

On Toronto Star, Jan 2026: She says she bought a two-bedroom townhouse, they built a one bedroom plus den. Here’s why she’s ‘never going to buy pre-construction again’

On Reddit: Link

Justice Myers described the debtor as insolvent and, for practical purposes, out of business, but noted that it still owns 65 completed townhouses requiring realization. The Court found that a stay was needed to allow Findev to develop an orderly procedure for maximizing recoveries, highlighting the lender’s decision to keep the senior mortgagees current rather than seek broad priming charges. The Court did not approve the proposed sale process or transaction structure at the initial hearing, leaving those matters for subsequent hearings.

The debtor was incorporated in Ontario on August 12, 2013, and is controlled by sole director and officer Paul Goldfischer, also known as Zvi Arie Goldfischer. It developed The Vic Towns, a 147-townhouse condominium project constructed between 1648 and 1682 Victoria Park Avenue, south of Lawrence Avenue. Of the project’s 147 units, 82 have been sold and 65 remain registered to the debtor. The completed development is otherwise operated through its condominium corporation.

From Toronto Star:

Tsui’s contract appears to state that both the square footage and the dimensions are “approximate” and may differ from what was shown in marketing materials.

She provided the Star with a screenshot of the condo fees from marketing materials, listed as $0.24 per square foot. But they turned out to be $0.36.

Tsui also said the monthly fees for hot water heater rental are unreasonably high, and over the term of the contract add up to more than the stated value of the heater, according to the rental agreement, a cost she says wasn’t disclosed when she agreed to purchase the home.

Water was also supposed to be included, but has turned out to be extra, she added.

Goldfischer said their designer recommended not putting in a door on the den.

But since Tsui wants one they will install it.

He added that the condo fee increase is due to “typical inflation,” as well as increases for water and hydro. He added fees will be adjusted in 2026 to about $0.28 per square foot, “resulting from the adjustment of water from the previous budget.”

“HVAC fees are for the cost of the equipment and interest over 12 years. The monthly fee includes maintenance, repair and replacement if required,” Goldfischer added.

As for the long delay in closing where buyers had to pay occupancy fees — monthly payments during the period before closing — he said the project consists of four blocks and the two facing Victoria Park were completed first. Buyers moved in while construction continued on the rear homes, and registration was only possible once the entire project was finished.

“The occupancy fees were a combination of the interest on the ‘phantom mortgage,’ which replaces what they would have to pay on their own mortgage, plus common expense fees, which they need to pay before and after closing,” he said.

“The interest rate on the phantom mortgage was set in accordance with Tarion rules.”

He blamed the pandemic, as well as “the Fortress issue,” for delays in construction.

Goldfischer said Fortress Real Developments had agreed to provide interim financing and arrange for construction financing, but did not end up doing so.

The two developers behind Fortress were found guilty in May 2025 of defrauding investors in Barrie, Ont., and Winnipeg on pre-construction projects that were never built, CBC reported.

Lawyers for the principals of Fortress said they had no comment.

Fortress used something called “syndicated mortgages,” where a group of people go in together to take on more of a loan than they otherwise could, according to court documents.

Court documents related to Fortress projects also state that they were used on the Victoria Park towns. But Goldfischer said there have not been any syndicated mortgages in the past four years.

“The Fortress principals did not discuss their source of funding with me. After Fortress collapsed, I read articles in the press (including the Toronto Star) which described the methods used by Fortress,” he said.

Hey guys I just bought a precon in Markham and builder is giving me options to upgrade my main floor(approximately 1050-1120sqft) from 9 to 10 which cost 39.5k. It will have Transom above main floor windows, Kitchen sliders will become garden doors with transom above, Approx. 8’ tall front door, 8’ tall interior doors and archways on main floor (where possible), 8’ tall garage roll up doors.

The second option I have is basement from 7 foot 7 to 9 feet which cost 29k and according to the floor plan if finished it’s approximately 670 sqft. Im debating on this but not sure if the ROI is worth it if I plan to finish and turn into a legal rental suite with side entrance.

Is it worth it to upgrade both or one over the other or not upgrade at all? If so which one is worth it? I have attached my floorplan for you guys to decide.

Thanks in advance

Putting a fancy car like a Porsche or a Lamborghini in front of a rather ordinary middle-class home when taking the listing photos?

i’ve been checking listings around the gta and every time i think one looks decent, the numbers fall apart. by the time i add the mortgage, tax, condo fees and basic expenses, it’s either negative or barely breaking even. i ran a few through a DSCR calculator too and most were pretty bad. am i missing something here? are people still buying for cash flow or is it mostly just hoping prices go up later?

Does anybody know which developers are selling the units and require an NDA?

My husband and I dream of moving back to Canada while our children are still young. Specifically GTA since we have family there. I am a Canadian citizen, but we currently live in Europe and neither of us currently has Canadian employment income, just local.

We are considering buying a property in the GTA, renting it out for a while until we get our financial picture in order and are able to move, and then either moving into it or keeping it, depending on what we are able to buy.

Some relevant details:

• I am a Canadian citizen but have lived abroad for many years.
• My husband is not Canadian.
• We live and earn our income in Europe.
• Our local bank is Deutsche Bank.
• We have family and friends around Oakville, Georgetown, Etobicoke but our residential and tax address is currently outside Canada.
• We would be looking at either short or long-term rental, depending on what makes more sense financially.

I am trying to understand the financing and practical side before speaking to banks.

For anyone who has done something similar:

1. Which Canadian banks or mortgage brokers are good at handling Canadian citizens living abroad?
2. What down payment should we realistically expect to make to break even: 20%, 35%, or more?
3. Will lenders consider foreign employment income or assets?
4. Would it be feasible to obtain a Canadian mortgage?
5. Are there major tax or withholding issues we should understand as non-resident landlords?
6. What kind of costs should we expect?
7. Are there particular areas or property types in Toronto, Oakville or Mississauga that work better as rentals but could also suit a family later?
8. What mistakes should we avoid?

We are still at the research stage. I would especially appreciate hearing from people who have personally bought in Ontario while living abroad, or from licensed mortgage professionals who regularly work with non-resident Canadians.

(Ps. I also realize housing affordability is a sensitive topic in the GTA, and I understand why people are frustrated about speculative investing.

Our situation is a little different. I’m Canadian , we love Canada, and genuinely plan and dream to relocate to Canada, and we’re hoping to establish ourselves before we move. The idea is to rent the property while we’re still living abroad, rather than leave it vacant, and eventually either live in it ourselves or keep it.

I’m really here to learn from people who have been through this process. If you think this is a bad idea, I’d genuinely appreciate hearing why, but I’d be grateful if we could keep the discussion constructive.)

TIA 🙏

I'm starting to see condos that are cashflow neutral, so I'm debating if it makes sense to buy one as an investment property at this point.

I already own property in the GTA and am ok to hold for 3-5 years before seeing any appreciation if that's relevant. I see principal paydown as still a win. Ideally would love to buy a duplex but that is out of my budget and I don't feel comfortable buying outside of the GTA with return to work being a strong push.

Notice a recent trend of people paving the front yard next to a driveway. There’s a mutual drive leading to parking at the rear, but if both neighbours pave the front it basically fits two cars side by side. The first one also moved the city no parking sign further to the right.

The next house moved what looks like a city planted tree to widen the driveway.

What’s the legality of this? I assume it’s not allowed, but are these getting grandfathered in, or is the city just not enforcing it? It also seems like it avoids the front yard parking fees. If the lot still meets the soft landscaping requirements, could you technically just pave a path beside the driveway that’s wide enough to effectively widen it?

We just bought a condo and are looking to upgrade our kitchen countertops, reface the cupboards and install a backsplash. Does anyone know reliable contractors who can help? I initially went to Easy Renovations and got denied service since this project is too small for them.

When did everyone become a realtor?

I’m not even exaggerating—half the people around me are realtors.

The rest are mortgage brokers, flippers, home inspectors, contractors, renovators, photographers, stagers, or selling windows, doors, blinds, kitchens, flooring, roofing, landscaping… if they’re not selling houses, they’re selling something to people who are.

Then I open Instagram or TikTok…
It’s another realtor making the same generic video. The same “tips.” The same “market update.” The same recycled advice everyone has heard a hundred times.

At some point I started wondering… who’s actually producing anything?

How much time and energy is being poured into creating content that adds almost no value?

Have we built an economy where a huge number of people make a living from the same houses changing hands over and over again?

Is it only in Canada or it’s same elsewhere?

I was looking at buying a condo near Yonge and Sheppard with a pool and gym. I was looking for recommendations on these condos and any other recommendations you may have; much appreciated, y'all!

- Pearl Place Condos - 4955 Yonge Street, North York
- Skymark Condominiums - 80 Harrison Garden Blvd, North York
- Avonshire - 100 Harrison Garden Blvd, North York
- Cosmo Residences - 35 Bales Avenue, North York
- Meridian Ⅱ - 25-31 Greenview Ave
- Cosmo Residences - 35 Bales Ave, North York
- Grande Triomphe - 10 Northtown Way, North York
- Triomphe - 5 Northtown Way, North York