Toronto Condo Market Update

If you’ve been following the Toronto real estate market lately, you’ve probably noticed something unusual — especially in condos. Not long ago, pre-construction units were seen as “easy money.” Buy early, wait a few years, sell for a profit.

Today, the reality is very different. Some pre-construction condo owners are now offering large cash payments just to get out of their purchase agreements.

What does “cash-back assignment” mean?

These deals happen through assignment sales, where the original buyer sells their purchase contract before completion. In today’s market, many assignments only work if the seller pays the buyer cash.

Typical incentives seen in the market

• Common: $50,000–$100,000

• Increasingly common: $150,000–$200,000

• Extreme cases (2024–2025): $400,000–$500,000

Most of these listings never appear on MLS.

They circulate through private networks and social media groups.

Why is this happening?

1️⃣ Contracts signed at peak prices

Most affected buyers signed contracts in 2021–2022, when prices were at historic highs.

2️⃣ Market conditions changed by completion

As projects near completion:

• Condo prices have declined

• Appraisals are more conservative

• Financing has become harder to secure

3️⃣ Mortgage qualification issues

Many buyers can’t close because:

• Appraised values are below contract prices

• Mortgages don’t cover the original purchase price

• Higher interest rates push payments beyond affordability

A simple example

• Original purchase price: $1,000,000

• Deposit paid: $200,000

• Current market value: $700,000

Even after forfeiting the entire deposit, there’s still a $100,000 shortfall.

To complete the assignment, the seller must pay that $100,000 in cash to the new buyer.

Not just condos

This isn’t limited to condominiums.

• Townhomes

• Freehold properties

• Suburban GTA markets

Losses tend to be larger in the suburbs, where price growth during the boom was more aggressive.

What the data shows

These trends are backed by official data:

• December 2025:

GTA new-home sales hit an all-time low

(Building Industry and Land Development Association)

• January 2026:

GTA average home price fell below $1 million for the first time since 2021

(Toronto Regional Real Estate Board)

• New condo prices: hovering around $1M

• New single-family homes: $1.4M, down 9% year over year

Extra incentives entering the market

Some sellers are adding non-cash incentives:

Builder leaseback programs

• Builder guarantees rent for a fixed period

• Example: $3,250/month for 2 years

• Helps buyers manage short-term cash flow

Key Point

The Toronto condo market is no longer about speculation.

It’s about:

• Who can absorb the loss

• Who can close

• Who has liquidity

For distressed sellers, it’s damage control. For well-capitalized buyers, it’s a rare negotiating window.

I hope today's update was helpful. If you are looking for guidance with buying, selling, or renting real estate in Toronto or the GTA, feel free to reach out anytime using the contact details below.

Email: chloe.jee@century21.ca

Text: 416.333.6523