When Will Toronto Real Estate Recover? The Case for 2028
At the end of August, Ralph Fox stood at the LCBO counter and asked a cashier whether American alcohol was returning to the shelves. That week’s news pointed to an imminent trade deal, and the answer was yes; they had been told to get ready. “That was my proof, right there,” says Ralph Fox, Broker of Record at Fox Marin. Within a few weeks, the talks had blown up, and the reserved optimism building in Toronto real estate since spring disappeared almost overnight.
Sentiment is very fragile right now. That is why everyone keeps asking, when will the Toronto real estate market recover? You can’t answer it by looking solely at sales data. Ralph Fox asked Ben Myers, President and Founder of Bullpen Research & Consulting and host of the Toronto Under Construction podcast, who has spent almost 25 years advising developers and lenders on where this market is headed.
Watch the Full Episode
If reading isn’t your thing, press play. In this episode, Ralph Fox, Broker of Record at Fox Marin, and Ben Myers, President and Founder of Bullpen Research & Consulting, share what they’ve learned from working with hundreds of Toronto buyers, sellers and developers.
Key Takeaways
Ben Myers of Bullpen Research & Consulting is telling his developer clients to wait until 2028 for a Toronto real estate recovery, and he describes that as his own forecast, not a certainty.
New condo completions in the Toronto area are expected to drop sharply at the end of 2027, because nearly every project sold at the 2021 peak will be finished by then.
Vacancy in several new Toronto rental buildings climbed to about 20 percent in early 2026 and fell back to about 5 percent by summer, Myers said.
Myers expects purpose-built rental construction to fall short of Toronto’s needs by 50 percent or more, and he sees no risk of an oversupply.
Canada’s federal foreign buyer ban is set to expire on January 1, 2027, and Myers expects Ottawa to let it expire.
When Will the Toronto Real Estate Market Recover?
According to Myers’ “I’ve been kind of saying to my clients, wait till 2028”.
Between now and then, he does not expect a rebound in resale. Sellers are not motivated to slash prices, and buyers are unwilling to enter bidding wars or step outside their comfort zone. That standoff creates a softer but more stable market.
How did we get here? According to Ben, new condo prices inflated after COVID as construction costs and development charges rose. Developers raised prices to cover them, and investors saw higher prices as proof of higher demand. The projects sold then are finishing now, producing what Myers calls record levels of completions while immigration has been cut and the economy is soft. Buyers are sitting out because no one wants to risk buying and watching their equity shrink months later.
Myers picks 2028 as a turning point because that is when the supply of newly finished condos falls off and could stay that way for at least 5-10 years. A completion is a unit that has finished construction and is ready to be occupied, which is different from a sale. A condo sold in pre-construction in 2021 shows up as a completion four or five years later.
By the end of 2027, Myers says, essentially every project that launched at the peak will have been delivered, apart from a few 60-, 70- and 80-storey towers that take longer. Very little has launched since, so essentially there is no next wave.
Ben’s math is simple. Even if demand stays at 60 to 75 percent of its peak, the market will receive about half the supply it had before. Fewer new units means fewer condos for rent, which pushes rents up. Once rents reach a certain level, tenants ask what they could own for the same monthly cost. That question begins to lift prices. You can run that comparison yourself with the FM Rent vs Own Calculator.
Current prices, sales and inventory for your area are on Fox Marin’s Market Intel page if you want to dig into the data.
What Is the Rental Market Telling Us Right Now?
With the pre-construction condo market completely stalled, most of Ben’s work is now in purpose-built rentals, as high-rise developers have been pivoting to rental for their sites.
In February, Ben noted that vacancy in several new rental buildings jumped from 5 percent to 10, then as high as 20 percent. Back then, many large purpose-built rental landlords offered two to three months of free rent. Then, through spring and summer, those buildings fell back to about 5 percent vacancy, and incentives shrank or disappeared.
“It was just shocking how quickly it went from, my god, we’re doomed, to okay, kind of interesting how the market has picked back up.” – Ben Myers, President and Founder, Bullpen Research & Consulting
Myers believes the higher end of the rental market could be a bellwether. Someone signing a lease at $4.50 or $4.60 per square foot must have some confidence in their job and family situation.
The market is also split by size. Investor-driven projects from 2021 and 2022 were full of small suites, so units of 650 square feet and under ar oversupplied and have seen the biggest rent declines. From about 800 to 1,000 square feet, rents are fairly stable, and Myers says some larger suites are rising.
According to Ralph Fox, “A lot of the rental profiles we see are people making $250,000, $300,000, $400,000 incomes and still renting,” he says. While many people in Toronto may have solid household incomes, the big issue with homeownership is the deposit. A household earning $250,000 still struggles to save the down payment on a $1.5 million house. We covered this topic in detail in Is Toronto Affordable in 2026? Why Cheaper Homes Haven’t Fixed It.
Myers agrees the down payment is the big hurdle. He cautions anyone assuming large rentals will always look like good value: part of their appeal today is that rents came down. At $5 to $5.50 per square foot, a 1,000-square-foot suite costs $5,000 to $5,500 a month, which no longer works for most tenants.
Will Purpose-Built Rentals Fill the Gap?
Myers says he has no concern that Toronto will overbuild purpose-built rentals, and he guesses the market will be undersupplied by 50 percent or more. A purpose-built rental is a building designed and held as rental housing from day one, usually by an institutional owner, rather than a condo unit rented out by an individual investor.
A pre-construction condo raises much of its equity by borrowing against buyers’ deposits. Lenders are comfortable because 70 to 90 percent of purchasers put down 15 or 20 percent and signed binding contracts, so revenue is known. A purpose-built rental building has no such certainty. Rents can fall before it opens, and the developer must put in far more cash. On some major projects, Myers says, that means $25 million to $35 million in equity. Most developers have to raise it, and investor enthusiasm for rentals is quite low these days.
“The future is a much more expensive Toronto and a much more expensive GTA.” – Ben Myers, President and Founder, Bullpen Research & Consulting
He compares it to cities like New York and Boston, which do not build enough for the number of people who want to live there. Whatever people thought of the pre-construction investor, Myers argues, that buyer spread a project’s risk across 350 to 500 individuals and got towers built.
One model he likes is the government as a partner. In June 2026, Building Ontario Fund put about $178 million of equity into the Scarborough Junction project alongside Republic Developments and Harlo Capital, unlocking roughly 1,700 rental homes in its first phase. Myers, who has done studies for the project, says the Government arm running the fund was flexible and easy to work with, which is very typical for a government agency.
Could Rent Control Come Back to New Buildings?
Ralph Fox tells Ben he views rent control as a serious risk, and Myers admits his developer clients rarely raise it as a potential issue. Ralph points to the rent freeze currently in place in New York City and here in Ontario, where both opposition parties are promising some form of stricter rent control.
Ben describes a nightmare scenario where legislation is introduced that stops rents from resetting to market when a tenant vacates. Fox notes that Ontario has had that in place before, and he believes it is why rental construction stalled for decades, and condos filled the pent-up demand in the early 2000s.
“You can’t strangle the market into being affordable.” – Ben Myers, President and Founder, Bullpen Research & Consulting
He would accept a cap high enough above inflation to allow owners to reinvest and earn a return. Without that, he argues, that capital is fluid and would move in search of better ROI from data centres to hotels.
How Much of a New Condo’s Price Is Tax?
About 30 percent of a new condo’s cost goes to government fees and taxes, according to Myers. On a $1 million property, that is $300,000. Because the buyer finances it, they also pay interest on it for 25 or 30 years, so they face a double whammy.
Fox credits Matt Young of Republic Developments, who led the Coalition Against New-Home Taxes in 2024, a group of Ontario developers pledging to cut prices dollar for dollar for every dollar of tax removed. The coalition says development charges rose 1,200 percent over 15 years.
The subject has now reached the mayoral race. On September 29, 2026, candidate Brad Bradford promised to waive Toronto’s municipal land transfer tax on the first $1.1 million of an eligible principal residence. His campaign puts the savings at about $18,000 at that price and the cost to the city at roughly $300 million a year, and rivals have questioned how it would be funded. To see what you would pay today, use the FM Land Transfer Tax Calculator.
Fox is frustrated that unaffordability is blamed solely on developers, investors, and greedy realtors.
“It seems like everybody else is being held accountable right now, except the government.” – Ralph Fox, Broker of Record, Fox Marin
Myers agrees the government shouldn’t escape blame.
What Happens to the Foreign Buyer Ban in 2027?
Canada’s federal foreign buyer ban is set to expire on January 1, 2027, and Ottawa has not said what will replace it. Myers thinks that the government will let it expire.
He mentions that while working at Baker Real Estate, he had access to the postal codes of every purchaser at its projects over 15 years, and he recalls that about 2.4 percent were outside Canada, and those living abroad planned to move here by the time the building was finished.
Fox raises another potential option: Australia lets non-residents buy new construction but not resale homes. Myers supports it because it puts money into new housing and jobs without adding competition for existing homes. A July 2026 analysis by law firm BLG reports the federal housing minister has pointed to Australia’s framework as a model.
Myers muses that pre-construction condos selling at $1,650 per square foot were not connected to resale values, jobs, or incomes, he says, and a correction was coming. Yet those sales financed towers that will stand for a century or more.
“So you can thank some of these irrational investors for getting your rent under where it would have been.” – Ben Myers, President and Founder, Bullpen Research & Consulting
What Will the Recovery Look Like?
Slow and led by small projects, Myers’ forecast suggests rents rise first as completions fall. He thinks rents and prices need to climb 5 or 6 percent before investors seriously consider pre-construction again. The first signs will be modest: a 60-unit building in Oakville or a 70-unit building in the Upper Beaches that sells well, then a few more launches, is what we should be looking for as a sign of recovery.
Ben does not expect Toronto to sell 30,000 new condos a year within the next decade. Beyond condo sales, he sees 6,000 to 10,000 purpose-built rentals a year and hopes the total returns to the 20,000 to 25,000 homes he considers underlying demand.
There is a built-in lag. A project sold in 2028 still takes at least 18 to 24 months to deliver, so the shortage lasts longer than the sales slump. That is why Myers expects big years for rent and price growth in the early 2030s. You can hear more from him on his podcast, Toronto Under Construction, or at bullpenconsulting.ca.
What Price Per Square Foot Makes a New Downtown Condo Viable?
The number Myers hears most often is $1,250 to $1,300 per square foot. A few developers told him they could launch at $1,100, but he is not convinced even that price would find 300 buyers for a tower on Yonge Street today.
Frequently Asked Questions
Whether you should consider buying a Toronto condo should depend on your time horizon. Ben Myers of Bullpen Research & Consulting expects resale prices to stay flat until new condo completions drop at the end of 2027. Ralph Fox of Fox Marin adds that nobody can time the bottom, which only becomes clear once prices are rising, which could be 2028 and beyond. Ben Myers expects Toronto rents to rise once new condo completions fall at the end of 2027, with strong growth in the early 2030s.
A purpose-built rental is an apartment building designed and owned ed as rental housing from the start, usually by an institutional landlord. It differs from a condo unit that an individual investor buys and rents out. In Toronto, purpose-built rentals require far more upfront equity from the developer than condos do.
Pre-construction condo prices in Toronto rose faster than resale values, rents and incomes could support. Pre-construction condos were selling for around $1,650 per square foot at the peak. When rates rose and prices fell, investors pulled back, and new condo sales have plummeted ever since.
Larger rental suites are outperforming small ones in Toronto in 2026. Suites of 650 square feet and under are oversupplied and have seen the largest rent declines. Rents for units roughly 800 to 1,00 square feet are fairly stable, and some larger suites are seeing rents rise.
The Fox Marin Perspective
On supply, Myers and Fox agree: over the long term, as we enter the 2030s, both rental housing and resale will be severely undersupplied, and affordability will remain an issue. On proactive step in the right direction would be for government to reduce development taxes and make sure the savings are passed on to buyers.
None of this tells anyone which month to buy or sell. It does suggest one useful test. Before you buy, ask yourself whether you could comfortably hold the property through 2028 if prices stayed flat until then. If the answer is yes, the long-term supply picture is on your side. If it’s no, it may be worth waiting.
If you would like a second opinion on a property you own or one you are looking to acquire a property, contact the Fox Marin team. We’re nice.
Fox Marin is recognized as one of Toronto’s most trusted real estate teams, with 550+ five-star Google reviews, more than 1,000 successful transactions, and over $700 million in sales volume. (*Source: RE Stats Inc. / Loft47, Jan. 1, 2018 – Aug. 31, 2026)
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This article was written by Ralph Fox, Broker of Record and Managing Partner here at Fox Marin Associates. Ralph is a Torontonian native who recognized from an early age that the most successful people in life apply long-term thinking to their investments, relationships, and life goals. It’s this philosophy, along with his lifelong entrepreneurial drive and exceptional business instincts, that help to establish Ralph as a top agent in the real estate market in downtown Toronto.
Ralph Fox & Kori Marin
Kori and Ralph's love affair with Toronto Real Estate have spanned several decades! It is incredible to see how far their mad crazy passion for design, architecture and innovation has taken them, which is only the beginning of their bigger vision and relentless goal-setting! Kori and Ralph have created this forum for their readers to explore the good, the bad, and the sometimes ugly real estate. An honest perspective about the ins & outs of the business - one in which they live, work and experience first hand every day. Nothing is more interesting than the "real" in real estate!
