Condo drought pushes GTA owners to treat small spaces like long term homes
Condo owners who banked on small Toronto units as stepping stones to houses are instead pouring money into renovations as a “major drought” in the condo market blocks their next move.
Condo sales in the Greater Toronto Area dropped sharply, with 3,880 units changing hands in the fourth quarter of 2025, down 15 percent from the same period in 2024, according to a Toronto Regional Real Estate Board report cited by BNN Bloomberg.
New listings fell 8.1 percent year over year and the average selling price slipped 5.1 percent to $652,945.
BNN Bloomberg reports that consecutive years of high completion rates brought a rush of new supply, while falling rents discouraged real estate investors, dragging down values in the condo segment and leaving many would‑be move‑up buyers on the sidelines.
Unable to sell, many condo owners are “opting to improve their existing living quarters,” and approaching projects with the mindset that “we need to make the space that we have work,” according to Colleen Mc Grory, group product manager at HomeStars.
She told BNN Bloomberg that people “are definitely more inclined to want to renovate the space they’re in rather than go out into the market and try to move up.”
A HomeStars survey cited by BNN Bloomberg found 34 percent of Canadians were more likely to spend on a renovation in 2026 than in the previous year, rising to 43 percent for those aged 18 to 34.
More than half of respondents said rising and falling house values made them more likely to renovate than move. That figure rose to 59 percent among 18‑ to 34‑year‑olds, and more than two‑fifths also cited today’s mortgage rates and other financial conditions as reasons to stay put and renovate.
For condo owners, Mc Grory told BNN Bloomberg there is strong demand to personalise standard units. She said “every condo is kind of the same when they’re (constructing) the building,” so many buyers change elements like countertops, fixtures and doorknobs to avoid a “cookie‑cutter” look.
Toronto‑based contractor Moose Condo Reno “has seen an influx of inquiries lately about remodelling older units,” CEO Mark Dayter told BNN Bloomberg.
He said older condos tend to be “very divided,” with enclosed kitchens and “a lot of walls,” and that his firm will “mostly go in there, often opening up the walls, making them open concept.”
Dayter said condo work is constrained by space and building rules, noting that renovations are usually limited to “everything inside the shell of the unit” and cannot interfere with “concrete walls, reinforced slabs or support columns.”
Governance adds another layer.
Linda Pinizzotto, founder and president of Ontario’s Condo Owners Association, told BNN Bloomberg that owners must check with their condo board or property manager before starting a project, even for flooring.
She said they “cannot just turn around and choose the vinyl flooring or laminates or hardwoods or whatever without getting approval from the board,” or they risk being “asked to remove it.”
Cost‑conscious owners often repaint, replace baseboards, remove popcorn‑style ceilings, or update bathrooms and kitchens rather than fully redesign main rooms.
Despite the weak resale backdrop, Dayter told BNN Bloomberg that owners should think ahead to a potential sale.
He said they should keep units as “functional as possible” rather than only “going for a look,” including maintaining adequate space for kitchen appliances, and that “all the changes that we’re doing today should be appealing to potential clients that would purchase the unit after you.”
Against this, Canada’s housing agency flagged both progress and risks on the supply side.
Canada Mortgage and Housing Corp. said in its spring housing supply report that Canada made “meaningful” gains in 2025, with housing construction up six percent year over year to 259,000 units and activity above the 10‑year average in most major markets.
CMHC said Toronto was an exception, with housing starts below the historical average and at the lowest per‑capita level among Canada’s seven largest regions.
CMHC reported that strong housing starts and completions met subdued demand, slower population growth and persistent cost pressures facing potential buyers, while condominium presales collapsed and unsold inventory surged, threatening future supply and long‑term affordability.
CMHC also noted earlier projections that between 430,000 and 480,000 new housing units per year are needed across ownership and rental markets by 2035 to restore affordability to 2019 levels based on projected demand.
