Home of the Week and more top real estate stories: Canadian real estate news for the week of Sept. 26

• By Teri Shaw
• Posted Monday, Sep 29, 2025 9:26 am

Home of the Week and more top real estate stories: Canadian real estate news for the week of Sept. 26

This week, a new CMHC report says the current downturn in the preconstruction market isn’t as dire as once believed. Plus, the prospective homebuyers trying to make it work without inheritance gifts, and one property worth a look.

Housing agency says Toronto preconstruction condo market downturn will reverse

Although preconstruction sales are at a 33-year low and some buyers are defaulting on their purchases, Canada Mortgage and Housing Corp. said there are signs that buyers will return. In a new report, the CMHC says the condo market is more stable than it was during the 1990s property crash, thanks to a stronger economy and a housing shortgage. As Rachelle Younglai writes, Ottawa and housing advocates say Canada has a deficit of homes given the increase in population and changing demographics, which will eventually boost demand for all forms of housing. The CMHC report compared the slide in prices for the current slump and the 1990s. The average price of a resale condo across the Toronto region is down 28 per cent from peak prices in early 2022, the report said. That is the price drop over the past 13 quarters.

On Sept. 25, real estate reporters Younglai and Shane Dingman answered reader questions about the state of the preconstruction condo market. Here are a few highlights from the Q+A.

Is there a better model than preconstruction sales elsewhere that Canada could adopt?

Dingman: Firstly, there are different models for condominium construction – in many parts of the U.S. they finance buildings essentially “on spec,” as in build and then sell to buyers. It’s been described to me that Canadian lenders are more cautious and like to hedge risk, and for many years the preconstruction market worked amazingly well, delivering hundreds of thousands of condos over years in Canadian cities.

The challenge today has less to do with the pre-con model than with the cost of the units: rising land costs, construction costs and some development charge costs all contributed to make the average condo unit market for close to $1,000 per square foot. When it became more expensive to finance the debt on these purchases they stopped making sense for a lot of buyers. Now builders are stuck with land they purchased based on assumptions about what they could sell it for. Many of them are struggling to find ways to do something cash-positive with those investments.

With foreign investment stifled, will condo prices reset to income levels of Canadians? And if so, at what ratio?

Younglai: Today, the bigger factor weighing on condo prices is the number of new condos coming on the market. Although the foreign buyer ban has undoubtedly weakened demand, what is bringing prices down is the spike in condo completions. Prices are down about 28% on average since their peak in 2022. That being said, in the Toronto region, the average price of a condo is still in the $690,000 range.

This week’s lowest fixed and variable mortgage rates in Canada

Some of the lowest available rates on the market right now are for three-year fixed mortgages, which have hovered between 20 and 25 basis points lower than for a five-year fixed mortgage in recent weeks, according to data from Ratehub.ca. The lowest available three-year fixed rate is currently 3.69 per cent, compared to 3.7 per cent for the lowest available variable rate mortgage. As Salmaan Farooqui writes, that means a three-year fixed rate mortgage could be a good option for someone who doesn’t want to take on the risk of a variable rate mortgage.

Inheritance gifts are creating a generation of haves and have nots

Across Canada, more young adults are relying on their families to get a leg up, especially when it comes to buying a home. But for those without that help, the path to financial security can feel steeper, slower, and often lonelier. As intergenerational wealth becomes more pronounced, the gap is widening between Canadians who can build for the future, and those still catching up.

A 2024 CIBC study found that 31 per cent of first-time homebuyers received gifts from family to help with down payments, up from 20 per cent in 2015. And the size of those gifts is growing. The average reached $115,000 last year, a 73-per-cent jump from 2019. Meera Raman spoke to young homebuyers struggling to make it all on....[READ MORE]