Toronto’s unsold condo rate has reached ‘an incredible level

Canada’s Condo Glut: Unsold Units Pile Up as Buyers Walk Away

In Canada’s largest housing market, unsold condominiums are accumulating at an alarming rate.

“It’s reached an incredible level,” said Ron Butler, principal broker at Butler Mortgage, in a Monday interview with BNN Bloomberg. “We have about a full year’s worth of inventory, and listings just keep climbing. There’s no sign of this slowing down or any near-term relief.”

Butler attributes the oversupply to years of “severe overbuilding,” particularly in Toronto’s market for ultra-small units.

“The tiniest of tiny condos,” he said. “It’s strange—despite Canada’s decade-long housing crisis, if you build a poor-quality product, people won’t buy it. It’s that simple.”

Many of these unsold units, he explained, were designed for investors rather than families, with layouts more suited to hotel rooms than homes.

“They’re roughly the size of a large hotel room, meant only for renting. There’s been a massive overproduction of these non-family units,” Butler said, noting that many Toronto listings are for condos under 500 square feet.

Buyers Backing Out, Developers Discounting

The situation has led to a 30% failure rate in condo closings, with many pre-construction buyers forfeiting deposits rather than completing purchases.

“Some will face lawsuits, but developers typically close the remaining units and then relist the unsold ones months later—at steep discounts—into an already weak and oversaturated market,” Butler said.

Beyond Toronto: Weakness Spreads

The problem isn’t confined to Toronto. Butler pointed to pricing discrepancies in Surrey, B.C., where some units are listed 25% above comparable properties.

“If you’re banking on prices hitting ‘X’ in five years, but reality is nowhere close, you’ve got a serious problem,” he said.

Even Calgary, long insulated from the pressures of Vancouver and Toronto, is now showing signs of condo overbuilding.

Price Drops Hit the Suburbs

While downtown Toronto prices remain stable, suburban markets are seeing significant declines.

“In Durham, outer Peel, and York Region, prices have dropped substantially—sometimes 15 to 20%,” Butler said. Similar trends are emerging in Hamilton and Niagara.

What’s Next? Immigration and Rates Hold the Key

Looking ahead, Butler said immigration trends and interest rate movements will be critical in determining the market’s direction. For now, however, Canada’s condo glut shows no signs of easing