Canadian Real Estate Investors Brace For Population Declines, & Toronto Condos Plunge

Canada’s real estate market is adjusting to new realities as population growth slows and condo prices in Toronto experience significant drops. Recent reports highlight a 57% decrease in permanent resident applications this past July, signaling a broader trend of reduced immigration. Such shifts could disproportionately impact provinces like British Columbia and Ontario, where high immigration has historically driven housing demand.

This population trend coincides with economic concerns. Despite adding over 500,000 people in 2024, Canada failed to generate new businesses, indicating weak economic momentum. Business growth remains stagnant, with GDP supported mainly by public administration—a concerning sign amid global economic uncertainties.

Toronto's condo market also faced setbacks, with prices dropping 2% in September, marking the fifth consecutive monthly decline. Despite early hopes for a recovery, weak demand and rising costs are accelerating the downturn. This suggests broader issues within the city’s real estate sector beyond interest rates.

Experts warn that provinces heavily reliant on immigration-driven demand may face rapid corrections in housing costs. Toronto’s cooling market is a case study of how declining demand intersects with economic challenges, creating ripple effects across the real estate landscape.

Policy changes, including caps on permanent resident applications, appear more reactionary than preemptive, aimed at managing perceptions rather than addressing root causes. Such measures, coupled with economic uncertainty, may further reshape housing trends nationwide.

As Canada navigates these shifts, investors and policymakers face urgent questions about how to adapt to slowing population growth and economic stagnation while maintaining housing stability.