This is a difficult blog to post. It’s going to sound a bit negative and might not make a lot of people happy but it’s the reality of today’s condo market sentiment....

For many years, a one-bedroom condo was a great way of taking your first step on the property ladder. Although you were, maybe, only buying a compact 600 square foot (or smaller!) condo, it was a start. From the early naughts on to about 2022, history told you properties values were only going to increase. You could even buy a condo pre-construction and it would be worth more by the time it was finished. This was a tried and true, good strategy – until everything changed.

Post pandemic, the prime rate increased, mortgage rates followed suit and all of a sudden, the carrying costs of owning a smaller property out weighed the benefit; even more so as the prices started to soften.

Traditionally, not many consumers buy a one-bedroom condo and stay there for life. It sometimes home for a while and sometimes bought as an investment to live in first and then rent it out. Oftentimes, they partner up, start a family, and inevitably, want more space. Regardless of their situation, the plan is to sell the unit and use the profit to help buy something bigger.

Since 2022, prices have been softening and rents are too. Some feel it’s hard to justify the purchase of a small condo that you’re only going to be in for a few years and run the risk that prices will continue to soften. In addition, with mortgage rates higher than they were, the monthly cost of carrying that condo is higher so many feel they would prefer to rent, at a lower cost than what it would cost to carry a purchase, until they feel more stability in the market.

This new reality also applies to the investor market. Ideally, any investor’s goal is to at least breaking even month to month. If you were losing a little, you knew the value was going up. For some it’s becoming harder to stomach holding onto an investment property that is losing money month after month, regardless, rightly or wrongly,  of the tax write-off benefits. Because of this, some/many investors have been trying to sell their suites and this has resulted in a substantial increase of 1 bedroom condos on the market (over 1200 right now, not including studios). With an increase of listings for sale, many investors who find it difficult to sell with the increased competition, have turned to renting again. This now has increased rental listings which in turn has started to soften the rental market.

What will the future bring?

I suspect that prices aren’t going to return to the peak of 2022 for at least five and, quite honestly, maybe closer to ten years. With any large investment, the mindset of a buyer should always be to hold on for 5-10 years, even in good times.

Is now a good time to buy or should I continue to rent?

Obviously, there are considerations other than financial when it comes to buying a condo. For one thing, stability. When you own your own condo, there won’t be any surprise rent increases (maintenance fees will go up every year, and if you have a variable mortgage, that will fluctuate). There’s also no chance you’ll be evicted because the owner wants to live there. There’s also the idea of being able to make the place your own… that brings comfort to many.

The opportunities are there for buyers with cash and/or sizeable down payments. If you’re looking to live in a space for a number of years, this could be an excellent time to jump into the market. There are definitely deals to be had. If you can get it at a good price now, even if the market continues to soften, the market will have to climb less for you to be assured you’ll get your equity out if ever it comes time for you to sell.

Why would I sell in today’s market?

Some people have to sell. Some don’t have to but really want to and they’re having to make some tough decisions. There are those that need more space and can’t buy another property without selling. There are those who put down the minimum amount on a purchase at the peak of the market and are now renewing their mortgages and are feeling the pinch. Some are looking at the reality of selling for less than they paid, and sometimes they may not even be able to sell it even for what they’ve mortgaged it for.

But if selling at a loss means getting on with a new life experience, then you do what you have to do.

The challenge is preparing today’s sellers for this reality. The type of conversations I’m having with sellers right now is setting expectations. Chances are they will be insulted, disappointed, surprised, and offended at how low someone’s coming in with an offer. Right now, an offer is an offer, and you work with what you get.

If there are a couple of similar units in your building for sale, you want to be the first one to sell, because current buyer sentiment is to get a property at a lower price than the last sale. As a seller, you want to set the precedent in a down market so you don’t sell for less than the last sale.

Moving into 2026, I think there will still be more play with prices and availability. I don’t think anybody will miss out by waiting, but I don’t think you’ll regret by buying now either as long as you understand the risks in whatever market you’re buying into. The market will come back but it depends on your timelines and your expectations.

If you want to have a conversation about your situation or are curious about how much your home is worth, please get in touch!