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    GTA Condo Sales Drop for 2nd Straight Month with Biggest Declines in Downtown Core

    Written By Robert Van Rhijn — As the founder of, Robert is one of Ontario’s leading experts on the GTA condo market. He is also the Broker of Record at Strata.

    May’s decreased activity indicative of buyers who already purchased to avoid new mortgage stress test

    The pressure was on for GTA homebuyers to secure financing ahead of this week’s highly-anticipated change to Canada’s mortgage ‘stress test’. But the latest sales data for May shows yet another dip in condo transactions for a second straight month as the explosion of demand unleashed in March continued to fizzle out.

    The Greater Toronto Area saw 3,368 transactions last month. May sales had more than doubled when compared to the same time last year. But transactions had decreased by 23% when compared to the market’s record-breaking peak in March.

    Despite lower sales numbers, property values managed to hold their ground. The average selling price of a Toronto-area condo was $676,000, virtually unchanged from the month prior. Homebuyers paid about $782 per square foot (PSF), following the start of a cooling market in April. Inventory levels, meanwhile, saw a moderate decrease with 5,935 condos hitting the market; an 8% drop from the previous month.

    Downtown Toronto takes its deepest plunge in May

    Gloomy rainy day in Toronto Streets

    Perhaps the most notable declines were in the downtown core, which recorded its biggest drop in market activity in the last 12 months. In May, condo sales were down by 19%. Certainly a far cry from the 62% nosedive seen in April last year, immediately following Ontario’s state of emergency declared on March 17, 2020. Still though, this most recent drop in sales transactions solidifies the continuation of a downward trend after the market’s long-awaited plateau in April.

    Homebuyers who managed to secure a downtown condo in May paid about $1,066 PSF, down from the April peak of $1,091 PSF. However, despite the new downward trend, downtown prices still remain about $285 above the GTA average.

    Incoming stress test ‘lit a fire’ under people to buy something...anything

    Leaving Toronto

    First launched in 2017 to cool an overheated market, the notorious stress test is a minimum threshold that potential homebuyers must meet. It ensures that anyone getting a mortgage will be able to pay it off if historically-low interest rates were to go up. And as of June 1st, the federal government raised that minimum qualification bar yet again.

    This expected change unleashed a flurry of sideline buyers, especially in April when the headlines took a bit of a turn, says Robert Van Rhijn, Broker of Record at According to Van Rhijn, these are buyers who were initially waiting around to see where property values were headed.

    “All of those people afraid of the mortgage changes coming June 1st...they decided it’s now or never. So it really lit a fire under them to get off the sidelines and just buy something, anything, while they still had greater purchasing power.”

    Van Rhijn believes a lot of those eager buyers had already entered the market by the time May rolled around. He says last month’s decreased sales activity also indicates the ‘burn out’ that typically happens after the traditional spring rush.

    “Put those two things together and of course we’re going to see a notable dip in condo sales.”

    ‘Sellers will just have to accept a lower price’

    For Sale

    TRREB has noted that month-over-month decreases signal the GTA may be exhausting its pool of potential buyers within the existing population.

    But Cliff Liu, a broker at, disagrees. He says May just goes to show that many people are still waiting things out. They’re also considering properties that have a lower barrier to entry.

    “I know offhand a lot of buyers who are now getting serious about pre-construction and assignments even. For these types of transactions, they just need a large enough deposit upfront. They don’t need to worry about getting some huge loan from the banks, especially under these new mortgage rules,” he said.

    Even though stress test changes make the path to homeownership a bit harder, it may be sellers who bear the brunt of it all.

    “We’re going to see properties sit on the market for a while longer heading into the summer. And sellers in a rush to liquidate their assets will just have to accept a lower price,” adds Liu.

    There are many investors who are ‘squatting on a pile of cash’ as Liu puts it. He says they’re just waiting for a distress sale, which occurs when a property must be sold off quickly.

    “It really comes down to a game of patience to see who...sellers versus buyers...can hold out longer.”

    Whether you’re a seasoned real estate investor or first-time purchaser, Van Rhijn says many people believe, erroneously, that they won’t qualify to buy under these new mortgage rules. But in reality, it’s only about 5% of active buyers who have now been forced out of the market.

    “For the remaining 95%, it just means their buying power is modestly diminished. So they’ll just have to settle for something a little smaller or not in their most ideal neighbourhood.”

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