Toronto Condo Buyers Face Losses as Pre-Construction Values Plummet

A carpenter in Vaughan, Ontario, is facing a $85,000 shortfall after the appraised value of a pre-construction condominium he purchased in 2020 fell below the original sale price, a situation increasingly common for homebuyers in the Greater Toronto Area.

Vitor Almeida, who also works as a real estate agent, agreed to buy the condo for $675,000. However, a recent appraisal valued the unit at $590,000, leaving him unable to secure a mortgage for the difference. “The market was so excellent back in 2020, we would have never thought. If I did know that this could have happened, I wouldn’t have bought the condo,” Almeida told CBC News. He now fears the developer will pursue legal action to recover their losses.

Almeida’s predicament highlights a growing trend in the Canadian housing market, particularly in the condominium sector. As interest rates rose and the market cooled, many pre-construction buyers are finding themselves owing more than their properties are currently worth. The average condominium selling price in the Greater Toronto Area was down more than five per cent in late 2025, compared with a year earlier, and Toronto condo prices have plummeted around 25 per cent since a peak in early 2022.

Mortgage broker Ron Butler warns that 2026 is shaping up to be the “biggest, problematic year” for pre-construction condo buyers in Toronto, with an estimated 28,000 units scheduled for completion. “There’s no question that the developer will chase you through the courts and they will win since you signed a valid contract,” Butler said. He believes buyers in this situation have limited options to avoid financial repercussions.

While some buyers attempt to assign their contracts to other purchasers, real estate lawyer Gathya Manoharan notes that this process is not straightforward. “You also need the builder’s permission when you’re assigning,” she explained. She added that builders often charge assignment fees, ranging from a few hundred to tens of thousands of dollars, further compounding the financial burden on buyers. Manoharan stated she has only seen one successful assignment out of all her clients.

The situation is exacerbated by a continuing imbalance between supply and demand. “I don’t think I have a single client who has a newly built property that’s retained its value,” Manoharan said, attributing the issue to a rush to invest in pre-construction homes during the market’s peak in 2022.

Diana Mok, an associate professor in real estate finance at the University of Guelph, suggests that the issue is akin to speculative investments. “Some stocks are really high risk … and naturally attract some speculators rather than long-term investors and then all of a sudden these stocks go south, and do you think anyone should do something to regulate, have some policies or even compensate these speculators?” she asked. Mok emphasized the importance of understanding the risks associated with committing to a fixed price years in advance.