Quick answer
- Toronto and Hamilton condo sales rose roughly 50% year-over-year in mid-2026, driven by rate relief, price resets, and returning first-time buyer demand.
- At the same time, the future supply pipeline is contracting as pre-construction launches slow and several planned projects are cancelled or delayed.
- For buyers, this divergence typically means more competition on resale units and tighter completion timelines on new builds over the next few years.
- Condo financing rules have not changed: OSFI’s stress test still qualifies borrowers at the greater of contract rate plus 2% or 5.25%, and high-ratio insurance is available through CMHC, Sagen, or Canada Guaranty.
- A pre-approval before shopping helps lock in budget and rate protection while the market moves.
Toronto’s condo market just did something unusual
Something odd is happening in the Toronto condo market. Sales in Toronto and Hamilton have climbed roughly 50% year-over-year in mid-2026, according to regional real estate board data. At the same time, the pipeline of future condos — the pre-construction launches that would normally feed the next few years of new supply — is shrinking.
Rising demand and shrinking future supply usually pull in opposite directions on price, timing, and competition. That is exactly why this moment matters if you are shopping for a condo, thinking about one for later, or trying to decide whether to buy a resale unit or a pre-construction one.
This article walks through what is driving the surge, why the pipeline is contracting, and what both signals may mean for your financing plan. No predictions — just a broker’s read of a live, unusual market moment.
Quick start: pick your path
Different buyers face different decisions right now. Skim the four paths below and jump to the section that fits.
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Why Toronto condo sales are surging
The first driver is affordability. When the Bank of Canada’s rate cycle turned, mortgage rates typically began to ease and monthly carrying costs became more workable. Borrowers who could not qualify eighteen months ago may now clear the stress test on units they had already been shopping.
The second driver is price. Toronto condos saw a meaningful correction between 2022 and 2024, and asking prices in mid-2026 often sit well below their earlier peaks. That gap has drawn back buyers who had been waiting on the sidelines.
The third driver is pent-up demand. A cohort of first-time buyers, newcomers, and end-users deferred purchases through the higher-rate period. As conditions eased, that demand returned in a concentrated way.
Context matters here. The earlier weakness in this market is documented in our post on why Toronto condo sales tanked in the earlier cycle. Reading the two together shows a market that has swung, not one that has permanently changed direction.
The shrinking supply pipeline: what it really means
That is different from resale inventory, which is what is on the market today. Resale inventory can rise or fall week by week as owners list units. The pipeline, by contrast, is a multi-year signal about what will be available in three, four, or five years.
Two forces are behind the contraction. Developer economics tightened as construction and financing costs stayed high, making some projects uneconomic at previously assumed pre-sale prices. Investor demand for pre-construction assignment sales also cooled, thinning out the early buyers many projects rely on.
The practical result is that pre-construction launches often slow first, then completions slow a few years later as projects that never broke ground never deliver.
For buyers, this typically means two things. If you are shopping resale today, you may see steady or rising competition as demand outpaces new completions. If you are buying pre-construction, closing timelines and completion risk deserve more scrutiny than usual. Our guide to pre-construction condos in Canada in 2026 covers that risk in depth.
Resale versus pre-construction: how the math differs
Not every condo purchase works the same way. Resale and pre-construction condos differ on almost every financing variable, and mixing them up is a common source of surprise costs.
A resale purchase closes in weeks. You put down a deposit, arrange financing, and take possession on a firm date. Appraisal happens near closing so financing is settled quickly.
A pre-construction purchase is a multi-year commitment. Deposits are staged (often 15 to 25 percent across several instalments), closing may not happen for three to five years, and your final mortgage is arranged closer to that later date. The rate you qualify at when you sign is not the rate you will fund at when the building completes.
Two additional layers apply to pre-construction only. Some units allow assignment sales, where you sell your contract before closing. Rules and taxes on assignments can be complex, and lender treatment varies. New-build units are also subject to HST rules — an HST rebate is often available for owner-occupiers, but investors typically must pay it up front and claim it back.
The comparison table summarizes the key differences. Definitions of assignment sales, HST rebates, and other terms are in the Pegasus mortgage glossary.
| Variable | Resale condo | Pre-construction condo |
|---|---|---|
| Deposit structure | 5–20% at close, one payment | 15–25% total, staged over months |
| Time to closing | Weeks | Typically 3–5 years |
| Appraisal risk at closing | Low — appraisal near funding date | Higher — value assessed years later |
| HST rebate applicability | Not applicable (used property) | May apply; owner-occupier vs investor rules differ |
| Assignment sale possibility | Not applicable | Sometimes allowed; lender and tax rules vary |
| Rate hold at signing | 90–120 days typical | Rate at signing does not carry to final funding |
| Occupancy fees before closing | None | Interim occupancy fees may apply on completion |
Financing a Toronto condo in this market: a roadmap
- 1Verify your budgetUse the Pegasus mortgage payment calculator to see monthly carrying costs. Include property tax, condo fees, and heat where applicable.
- 2Get pre-approvedA pre-approval confirms what you can borrow and typically locks a rate for 90 to 120 days while you shop.
- 3Understand the stress testThe mortgage stress test is a federally mandated qualification rule that requires Canadian borrowers to qualify at the greater of contract rate plus 2% or 5.25%. It applies to condo mortgages the same way it applies to houses.
- 4Plan your down paymentMinimum down payment is 5% on purchase prices up to $500,000; 5% on the first $500,000 plus 10% on the balance between $500,000 and $1 million; and 20% on purchases of $1 million and above.
- 5Arrange high-ratio insurance if applicableMortgage default insurance is required on any purchase with less than 20% down and is available through CMHC, Sagen, or Canada Guaranty. Use the CMHC insurance calculator to estimate the premium.
Complex files — self-employed income, previous credit issues, or a mix of income sources — often benefit from broker guidance. Razi Khan, Founder and Mortgage Broker at Pegasus, and the Pegasus team work with lenders across Canada to place files that a single bank might decline.
| Purchase price band | Minimum down payment | Default insurance | Illustrative example |
|---|---|---|---|
| Up to $500,000 | 5% of purchase price | Required (CMHC / Sagen / Canada Guaranty) | $25,000 on $500K |
| $500,000 to $999,999 | 5% on first $500K + 10% on the balance | Required if under 20% down | $50,000 on $750K |
| $1,000,000 and above | 20% minimum | Not eligible for high-ratio insurance | $200,000 on $1M |
Common mistakes Toronto condo buyers make right now
A few pitfalls to watch for in the current market:
- Skipping the status certificate review. The status certificate details the condo corporation’s finances, reserve fund, and any special assessments. Review it with a lawyer before conditions are removed.
- Ignoring occupancy fees on pre-construction. During the interim occupancy period on a new build, you pay occupancy fees to the developer that do not go toward mortgage principal.
- Over-relying on a rate hold. Rate holds typically last 90 to 120 days. If closing is further out, especially on pre-construction, the hold may expire and rates at funding may differ.
- Misreading pre-construction pricing. Advertised prices often exclude HST, development levies, and closing adjustments. Read the total price, not the sticker.
- Under-budgeting closing costs. Ontario land transfer tax is meaningful, and Toronto adds a municipal tax. Use the land transfer tax calculator to plan.
- Skipping broker guidance on complex income. Self-employed buyers, contract workers, and those with variable income often need alternative documentation. See our take on why work with a broker.
- Waiving conditions in a bidding war. Waiving financing or inspection to win a bid can turn into a serious problem at closing.
Frequently asked questions
Why are Toronto condo sales going up in 2026?
Is now a good time to buy a condo in Toronto?
What is happening to Toronto pre-construction condos?
How much down payment do I need for a Toronto condo?
Do condo mortgages have a different stress test?
Should I buy a resale condo or a pre-construction one?
Do I still need CMHC insurance on a Toronto condo?
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About the author
Razi Khan
Founder, CEO & Licensed Mortgage Broker · Pegasus Mortgage Lending · Toronto, Ontario · FSRA Lic # 11479
Razi Khan is the Founder, CEO, and a licensed Mortgage Broker at Pegasus Mortgage Lending Center Inc., based in Toronto. With over 20 years of experience in the Canadian mortgage industry, Razi has personally guided more than 3,000 clients through some of the most complex and high-stakes financial decisions of their lives — from first-time purchases in the GTA to refinancing strategies, alternative lending solutions, and cross-border mortgages for Canadians buying in the United States.
Razi founded Pegasus in October 2008, launching the brokerage at the height of a global financial crisis. He works across the full spectrum of borrower profiles, with particular expertise in complex files including self-employed borrowers, credit-challenged clients, and investors building multi-property portfolios.
Learn more about Razi Khan →Sources & references
- Toronto Regional Real Estate Board — Market Watch: https://trreb.ca/market-data/market-watch/
- Canadian Real Estate Association — Housing Statistics: https://www.crea.ca/housing-market-stats/
- OSFI — Guideline B-20, Residential Mortgage Underwriting: https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-b-20
- CMHC — Mortgage Loan Insurance for Consumers: https://www.cmhc-schl.gc.ca/consumers/home-buying/mortgage-loan-insurance-for-consumers
- Urbanation — Toronto condominium research: https://www.urbanation.ca/