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For the first time in years, some bachelor and one-bedroom condos in Toronto are selling for under $400,000 — but that could lead to troubles with supply down the line, according to the Toronto Regional Real Estate Board (TRREB).
With prices falling across the housing market, many renters who once assumed they’d never buy in the city are now seriously considering it. But experts warn if the current inventory goes fast, the city could face another housing shortage.
James Milonas, realtor and managing director at The Agency Toronto West, is currently working with a prospective buyer who now believes homeownership is finally within reach.
“[He] has been renting for the last eight years, just saving his money,” Milonas told CBC Toronto. “We had a chat pre-Christmas and he was like, ‘What do you think? Is this the right time for me?’”
Milonas has now had that question from a handful of renters, and based on the current market, he’s told most of them to go for it.
Recent TRREB data shows the average condo selling price in the GTA was down by 5.1 per cent year-over-year in the fourth quarter of 2025. In one Toronto neighbourhood, the average listing price for that period was as low as $384,333.
For the city of Toronto as a whole, the average price was down to $690,607 in the fourth quarter of last year, compared to $715,920 for the same period the year before.
TRREB meanwhile reported 3,880 condo sales in the same period – down by 15 per cent compared to the year before.
Lower prices are the result of buyers regaining some bargaining leverage, according to Jason Mercer, TRREB’s chief information officer.
“People have had more negotiating power over the last year than they did, say, two and three years ago,” he told CBC Toronto.
Fewer new builds could lead to housing shortage
But Mercer has concerns the price drop could have a negative impact on the market in the longer term, especially as the number of new builds has dropped to meet market needs.
“We’ve heard stories about low pre-construction sales,” he said. “Eventually that’s going to translate into fewer starts and fewer completions down the road. And so I think one of the things we need to look at from a policy perspective is how we’re ultimately going to fill that gap. ”
If the issue isn’t addressed, we could see another housing shortage in a few years, Mercer said.
Anya Ettinger, a realtor with Bosley Real Estate, noted a lot of the more affordable units currently available are leftover stock from investment properties.
“[With] the rental market down, it doesn’t make sense for investors to be buying condos because they’re not cash flow positive,” she told CBC Toronto. “Now all of these investor-created condos are just sitting on the market and therefore pulling up inventory.”
Whether it’s the lack of rent control or impractical floor plans, some Toronto renters say they’re swearing off new buildings. Naama Weingarten has more on why they say new isn’t always better.
While the lower prices are good for renters looking to buy, they’ve created issues for non-investors who jumped into the market within the last five years or so, Ettinger said.
“Those people are getting burned,” she said. “[They’re] people who never intended to profit off the market. They just wanted to use it as a stepping stone and now are faced with the decision of, ‘Do I sell for less than I purchased for and make that work or do I just hold out and make the space I’m in work? ’”
In the meantime, Milonas maintained now is the time for renters to seriously consider making a purchase if they can.
“If your monthly payment of your rent and your mortgage are give or take in the same ballpark, why would you not build your financial future versus paying someone else’s mortgage?” he said.
He acknowledged it can be a daunting decision for many renters but suggests at least having a conversation with a realtor.
Ettinger’s advice is more cautious.
“I’d really encourage you to take a step back and look at it, specifically how it relates to you and the numbers, how they work for you,” she said.
