Pandemic-Era Condo Buyers Struggle With Mounting Losses in Cooling Market
An hour’s drive from downtown Toronto and just under 1,000 square feet, the two-bedroom condo was never meant to be home for long. It was a stepping stone into an overheated housing market for Francesca Parc and her partner.
In 2021, the long-time renters had suddenly found themselves with stable government jobs and qualifying for a $500,000 mortgage.
“Everyone around me was always saying, if you own a place, it’s an investment,” Ms. Parc, 36, said. “Why pay someone else’s mortgage?”
They thought they’d lucked out when their offer to buy a $520,000 two-bedroom condo was accepted. But five years later, Ms. Parc sees things differently. If the couple were to sell the condo today, they estimate they’d lose $70,000 to $100,000. Leasing would mean a $6,000 annual loss, based on the difference between what they could charge for rent and their mortgage payments plus condo fees.
“If the stars were looking down on me, they would have rejected our offer,” she said.
For decades, the prevailing wisdom across major Canadian cities such as Toronto and Vancouver held that owning a property for at least five years virtually guaranteed a profit. Today, that assumption is being put to the test.
A growing number of Canadians who purchased starter homes at peak market prices are now in a bind. They can sell at a loss, attempt to rent it out in a punishing market, or postpone reaching major life milestones in a gamble that the market rebounds soon.
According to January data from HouseSigma, condo owners in the Greater Toronto Area who bought in 2020 and sold last month saw a median loss of $18,700. Those who bought in 2021 lost $56,000, and 2022 condo owners lost a whopping $116,000, or 19 per cent.
In Metro Vancouver, condo owners began seeing median losses above 7 per cent if they purchased after the start of 2022 and sold last month.
Selling takes longer too, with Toronto condos sold last month spending an average of 100 property days on the market compared to 58 days in 2021.
“At the height of COVID, a lot of people were buying condos in their mid-to-late 20s and the plan was always: ‘let’s wait five years and then sell our condo and buy a house,’” said Toronto realtor Anya Ettinger. “The life plan hasn’t changed … the market has.”
Provincial land registry agency Teranet said in a 2025 report that among solo first-time buyers of condos in Ontario, those 30 and younger were responsible for 41.5 per cent of purchases over the past five years. Among Ms. Ettinger’s current clients looking to upsize, roughly 75 per cent bought in that time frame.
If someone purchased for $675,000 with a minimum down payment, “their mortgage balance is about $600,000 – now the value of that condo is $550,000,” she said. “They have to cover that gap.”
The five-year horizon made sense historically, with data from the Toronto Regional Real Estate Board showing that average condo sale prices increased by more than 50 per cent between December, 2015, and 2020 alone. Someone who bought for $609,110 could sell for just under $1-million five years later.
But homes were never meant to be merely an investment, Ms. Ettinger said. “It should never have been the norm.”
Some who resorted to renting out their condos have also been stung by higher interest rates.
Shortly after moving into their 500-square-foot Whitby condo at the start of 2022, Dilyar Murat, a Pickering, Ont.-based realtor, learned that he and his wife were expecting their first child.
Having shelled out $585,000 for the unit, selling would have wiped out their entire down payment. They’ve held on in the hopes they can sell it for more later. In the meantime, they were able to save enough to put a down payment on a bigger home at the end of 2023.
As for their condo: “It’s been rented out, luckily to a great tenant,” Mr. Murat said. “But it’s been bleeding cash since.”
Their variable-rate mortgage, which they took out at 1.35 per cent, rose rapidly to 6.1 per cent within about 15 months. Though rates later eased, Mr. Murat still carries roughly $1,900 a month in negative cash flow.
But as prices for larger homes have come down, it’s sometimes narrowed the gap to move up the property ladder for those who do manage to sell, said Ms. Ettinger.
When Robert Valent decided to upsize from the downtown Toronto condo he bought in 2021 and purchase a home with his partner, they found the homebuying process uncomplicated.
“I don’t think that there really was any competitive offer, plus it had been on the market for almost a month,” Mr. Valent said. The four-bedroom, 1920s-era detached home in the city’s west end had a backyard for their dog to run in, finished basement and enough bedrooms to host guests.
As for the condo he bought early in the pandemic at $915,000, he now estimates it would fetch closer to $800,000. Mr. Valent had room in his mortgage to draw funds to pay for his share of the down payment and renting out the flat covers condo costs for now. But Mr. Valent’s story is the exception rather than the rule as rents dropped to 16-month lows nationally.
The focus for most of those unloading their condos is mitigating losses rather than preventing them.
A fresh coat of paint “goes a long way,” Ms. Ettinger said. Replacing carpeting with laminate or hardwood can help, too. But luxury fixtures or features designed to impress on listings – such as high-end appliances – can easily add up to “lipstick on a pig,” if done wrong, she said.
When renting out a property, Ms. Ettinger recommends buyers assess if the rent covers the mortgage and maintenance fees, whether owners can qualify to carry two mortgages, and whether they can truly see themselves being landlords.
For most who bought between 2020-22, mortgage broker Ron Butler said options are limited. “There is no renovation that will save anybody,” he said. His advice is to stay put, “as long as you can.”
As for Ms. Parc, by 2025 she felt that she’d reached that point. The market had tanked, and her nearly two-hour work commute was wearing on her, as was the tight space.
They jumped at an opportunity to rent a two-storey house in the city from her parents. Today, the couple leases out their own condo for $2,400 a month, although it “doesn’t come close to covering our overhead costs,” Ms. said.
They also pay $2,500 in rent and utilities to Ms. Parc’s parents, though it’s an expense they feel least burdened by. “The space, the area … it’s the best money that we’re spending,” she said.
This article was first reported by The Globe and Mail
