The Thesis

Toronto’s Market Freeze is Today’s Opportunity.

With pre-sales stalled, construction halted, and demand still rising, Toronto is entering a rare window where distressed assets can be acquired below replacement cost.

Timing

A Market at an Inflection Point

For over two decades, Toronto’s condo market was driven by pre-sales. Investors paid a premium upfront, expecting steady appreciation by the time units were delivered. That system collapsed in 2022 when pre-sale pricing ran 30–35% higher than resale values. Rising rates and weaker absorption pushed projects into distress, leaving developers with unsold inventory and buyers underwater.

Today, pre-sales have virtually stopped, construction starts have collapsed, and more than 13,000 units remain frozen in stalled projects.

What The Data Tells Us

Unsold new condo units

Unsold new condos have piled up as buyers pulled back from pre-sales. With absorption well below the 70% threshold developers need to secure financing, thousands of units remain on the market — and are now available at a discount.

New Condo Sales

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Cancelled Projects

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14,497

Q3
2022

19,460

Q3
2023

23,918

Q3
2024

City skyline with modern glass and brick buildings, including a mural-covered building and a clear blue sky.

Condo Development Has Stalled Fueling a Future Supply Squeeze

-84% Drop

in new condo starts since the 2018 peak.

Delays & Cancelations

Over 50 towers delayed or cancelled, representing ~13,000 units.

Pre-sales under 40%

Average pre-sales absorption is under 40%, well below the 70% required for construction financing.

Unsold Inventory

Developers are holding unsold inventory they can’t move at retail pricing.

“Toronto’s real estate market isn’t crashing. It’s freezing.”

— Maclean’s, Aug 2025

The Opportunity:
Buy at the Bottom

With developers unable to launch new projects, completions will slow sharply after 2025 and fall to nearly zero by 2028. At the same time, Toronto’s population continues to grow by over 100,000 people per year. The mismatch between demand and supply will drive prices higher — creating a rare window to acquire assets well below replacement cost.

$875/sq. ft

average acquisition price for TCC.

17–25% Discount

to replacement cost.

30–45% Discount

to peak pre-sale prices.

The Timing:
Why Act Now

This is the moment to enter: acquire at a discount now, rent through the holding period, and exit when the rebound is fully priced in.

By 2028, new supply dries up almost completely.

It may take until 2033–34 before meaningful new completions arrive.

Demand doesn’t wait: immigration and urban employment continue to expand.

Rental markets are already rebounding, with multiple bids on downtown units.

Toronto City Core REIT exists to capture a rare market dislocation: buying prime condos below replacement cost today, holding through a multi-year supply crunch, and delivering strong returns when the market normalizes.