Why are so many big-city condos sitting empty?

Challenges Faced by Condo Investors in Toronto's Housing Market

A cute little condo in Toronto's Harbor front neighborhood has been struggling to sell for over 400 days.
Condo sales in Toronto are at their lowest since the 2009 financial crisis.
Many condos in Toronto are sitting empty and struggling to find buyers.
The main issue is that most condos on the market are owned by middle-class couples who rent them out to cover their mortgage payments.
The value of condos has risen while rental rates have not kept up, making it difficult for investors to make a profit.
The high carrying costs, including mortgage payments, property taxes, and maintenance fees, are causing investors to be short thousands of dollars each month.
Increasing the rent is not a viable solution as the market cannot bear the high rental rates.
As a result, more people are leaving the rental market in Toronto and finding alternative housing options.
Condo investors are facing challenges due to the inflated prices and low rental rates in Toronto's housing market.

Condo prices in many big cities have stalled or dropped in recent years.
Investors who bought condos since 2022 may have already experienced a significant decrease in value.
Some investors are now facing the fear of losing a substantial amount of money on their condo investments.
Preconstruction buyers are facing even more dire circumstances, with some opting to walk away from their deposits.
In the past, preconstruction condo investments would often increase in value before the units were even occupied. However, this is no longer the case.
Completed condos are not worth what investors paid for them, leading some to try to sell their units as a means of escaping a bad investment.
The market is flooded with condos for sale, creating a buyer's market.
However, many of these condos were not built for potential buyers, as they are smaller and targeted towards investors.
The average size of new condos has significantly decreased, making rental housing a more attractive option for investors.
These smaller investment condos are currently flooding the market, contributing to the challenges faced by condo investors.

Over 13,000 condos in the Greater Toronto Area are primarily investor units listed for sale.
The focus on these condos was not on quality, functionality, or suitability for families.
Some of these condos lack basic amenities like closets.
Investors prioritize value for money over floor plans, finishes, or views.
Condos built after 2016 are mostly lived in by owners, while older, larger condos are occupied by their owners.
The current market is predominantly driven by Millennials looking to enter the housing market.
The lack of suitable options for starting a family or having additional space for work or guests is a challenge.
The limited inventory and mispricing of condos have created difficulties for both sellers and buyers.