Toronto and Vancouver’s condo industries collapsed spectacularly in 2025. Projects were cancelled, and buyers of pre-construction units were left with homes worth far less than what they paid for them. Pre-construction sales all but dried up, and some early-stage developments were converted to purpose-built rentals. This coming year, the dysfunction will bleed past Toronto and Vancouver and become a problem that affects all major urban centres. This housing collapse will extend beyond high-rise condos: pre-construction sales of all forms of ownership housing are now declining. Eventually, this will translate into fewer housing starts and sales across the country.

To understand where we’re headed, we first have to understand how we got here. In the last few years, home prices rose at different rates across the country. Due to several factors—including the steady decline in global interest rates—prices more than doubled over the past two decades in southern Ontario and B.C.’s Lower Mainland, relative to income. In other areas, such as Edmonton and St. John’s, incomes kept pace with prices until the start of the pandemic.

Speculators identified where prices would hike due to shortages and bought up units, sending prices soaring........

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