Although spring is typically an active season for Canada’s real estate market, Toronto home prices fell noticeably in April due to an economic slowdown. As the housing market continues to weaken, more homeowners are falling into financial distress, and a growing number of foreclosed properties are appearing on the market.
Continued decline in Greater Toronto home prices
According to the Financial Post, the Toronto Regional Real Estate Board (TRREB) reported that the average home price in the Greater Toronto Area in April was $1,051,969, down 4.9 percent year-over-year from April 2025. The composite benchmark price, which represents a typical home, fell 6.6 percent year-over-year.
The Toronto condo market, which entered a correction phase in 2023, has now declined for four consecutive years. In Q1 2026, condo benchmark prices fell 10 percent year-over-year, marking the largest quarterly drop in four years. Meanwhile, condo sales volume dropped 11 percent year-over-year, about 40 percent below the 10-year average. TD Economics expects Toronto condo prices to fall another six to seven percent in 2026, with a further three percent decline in 2027.
Industry analysts say the main cause of the ongoing downturn is a supply-demand imbalance and population decline. Inventory remains high, while demand is weak due to economic uncertainty, sluggish job growth, and high living costs. Buyers are largely staying on the sidelines, expecting further price drops.
Toronto’s weak condo market is closely tied to Canada’s broader economic conditions. Since 2026 began, Canada has lost 112,000 jobs, marking its worst start since 2009 (excluding pandemic years), indicating a broad economic slowdown.
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Surge in foreclosed properties in Toronto
As home prices continue to fall, more homeowners are falling into distress. According to publicly accessible listings databases used by real estate agents (IDX and VOW), foreclosure listings in Ontario reached a two-year high in April, exceeding 300 properties.
According to the Toronto Star, Jonathan Alphonso, head of Mortgage Broker Store and a Royal LePage Terrequity agent, said the data only represents “the tip of the iceberg,” since he can only track properties explicitly labeled as foreclosures, and many banks do not disclose this status.
“I’d say, I’m maybe capturing 25 to 30 percent of all power of sales,” he said. “We’re seeing a ton of power of sales and a lot more severe power of sales because many people owe more than the property is worth.”
Since the market peak in February 2022, home prices have fallen more than 20 percent, leaving many owners in “negative equity,” where mortgage balances exceed market value.
Graeme Hamilton, a trustee at Spergel, said: “We’re in a depressed real estate market, so it’s not like there’s this sideline of buyers, right? I think it’s just one of those perfect storms, unfortunately.”
In foreclosure proceedings, banks take back properties and list them for sale. Homeowners remain responsible for any shortfall between the sale price and the outstanding mortgage. If they cannot cover it, they often end up filing for bankruptcy.
Developers buying new condos for rental conversion
According to the Globe and Mail, Montreal-based real estate company Jesta Group plans to invest $500 million CAD to acquire over 1,000 newly built condo units in Toronto, converting them entirely into rental housing. The company said the move is driven by a recently announced HST rebate policy and marks its entry into Toronto’s rental market.
As part of the plan, Jesta’s first transaction involved purchasing nearly all unsold units in a newly built condo building for $30 million CAD, located in downtown Toronto near Toronto Metropolitan University.
In addition to Jesta, other institutional players are also acquiring unsold condo inventory at scale. For example, High Art Capital, which reportedly has government backing and manages up to $1.3 billion CAD, recently launched a program to acquire and convert 2,200 new condo units into rental housing, some of which will be offered at affordable rates.
Industry forecasts suggest that by 2030, Toronto may face a shortage of newly built housing due to a sharp decline in condo construction starts in recent years, combined with continued national population growth, which is expected to increase housing demand further.
Jesta plans to rent out these units at approximately $4.25 per square foot. For a 500-square-foot unit, purchased at around $400,000 CAD, the expected monthly rent would be approximately $2,125 CAD.
By Li Ting, Vision Times
