Mar 17, 2026
Buying a first home is no small feat for many Canadians. With the cost of home ownership still out of reach in popular locations, families have been stepping in to help their children enter the housing market.
The Survey of Financial Security from Statistics Canada found that in 2023, just over 20% of homeowners had financial support of some kind from family members (e.g. gift, inheritance, loan, etc.) (1). While supporting your children is important, there is some risk that comes with helping them purchase their first home.
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Consider this hypothetical situation. Alex, a 30 year-old engineer making six figures, is hoping to purchase a condo in Greater Toronto. He works hard, saves money, invests wisely, but just can’t scrape up enough cash to find something that fits his needs. But in 2024, a one-bedroom condo in Toronto for $525,000 became available. To help Alex secure this great opportunity, his parents, Bruno and Greta, gave him half of the 20% downpayment — $52,500 — while he paid the other half.
Fast-forward over a year later and the Toronto condo market has cooled, and Alex’s condo has now dipped $20,000 in value.
Did Bruno and Greta make the wrong call by helping Alex buy when he did? Should they have waited?
Breaking down the data
According to recent data from the Toronto Regional Real Estate Board (TRREB), the average condo price in Toronto fell from $715,920 to $690,607 — a drop of 3.5% — from the last quarter of 2024 to Q4 in 2025 (2). Across the regions the TRREB covers (York, Halton, Peel and others), condo sales fell 15% year-over-year, the average price for condos fell 5.1% and the amount of active listings increased 6.2%.
The glut of condo supply in the city combined with slowing sales is giving buyers much more negotiating power. But, people like Alex are being hit by the lack of movement.
“Those people are getting burned,” Toronto realtor Anya Ettinger told CBC News, adding, “[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?’ (3)”
A reason for the increase in supply and lack of sales is dwindling demand, partly caused by the rise in interest rates in 2022 and the federal government’s trimming of international student permits, Canadian Mortgage Professional reports (4). Less students means less renters to use up the overcrowded supply of condo studio units.
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Get StartedWill the trend continue?
To foretell whether the Toronto condo market will rebound, it’s important to analyze the amount of units that are available. And it’s looking like it could slowly dwindle as new condo builds are sharply declining.
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The most recent data from the Canadian Mortgage Housing Corporation (CMHC) shows that through the end of September 2025, only 2,540 new condo units were started. That’s a decline of 79% compared to 2024 — the lowest level of condo starts since 1998 (5). Many projects planned for completion in 2026 or 2027 are no longer moving forward, setting the stage for supply to be absorbed in the coming years. But, it will take some major macro economic shifts for that to happen.
REMAX’s 2025 Condominium Report shows that a “gradual thaw” of the condo market is occurring, its current lag is expected to persist until mid-2026 (6). Additionally, a more balanced market isn’t expected to materialize until 2027.
Some of the reasons for the condo market glacial pace are due to major economic factors such as tariff uncertainty, upcoming mortgage renewals, higher living costs and lack of stable employment for Torontonians, REMAX noted.
Did they make the right decision?
Buying a home is partly an investment, but also a lifestyle decision. It’s something you can’t time perfectly, and shouldn’t try to. Bruno and Greta helping Alex purchase a home that is now worth $20,000 less wasn’t necessarily the wrong call — price is only one factor of many. A quality of life improvement for Alex, location of the condo and the rising cost in other areas of living (e.g. groceries), all supported their purchasing decision.
Moreover, housing markets are cyclical, waxing and waning alongside supply and demand. Arguably, if you have a protracted time horizon — which a 30 year-old certainly does — many real estate purchases can be justified in the long term.
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Sure, the family could have waited to take advantage of lower prices in future years, but it can be notoriously difficult to know the ideal time to buy. Hindsight is 20/20, as they say.
Read more: The ultra-rich are bailing on volatile stocks right now — these 4 shockproof assets are their new safe havens
How to navigate the current market
Navigating this current market as a condo owner means holding onto your property as prices aren’t set to bottom out quite yet. You only take a loss on your property if you sell it at a loss, not if it theoretically drops in value.
On the other hand, buyers should take note of the supply and lack of demand in the market. But, they shouldn’t wait too long — once inventory tightens enough, prices will likely bounce back.
If you’re thinking of entering or riding out the current condo market in Toronto, here are some ways you can reduce your losses.
- Don’t react to market fluctuations. Real estate markets move in cycles. Losses typically only become real if you sell during a downturn, so many homeowners choose to wait for conditions to improve.
- Stress-test yourself. Even if prices are well within your budget, stress-test yourself by ensuring you have a solid emergency fund in place (3-6 months’ of expenses saved) to ride out any market volatility.
- Consider renting instead of selling. If you need to move during a market drop, consider renting instead of selling to wait for prices to recover.
Bottom line
Buying a home, especially if you’re helping a loved one, can be a stressful time. Like any major financial decision, pay attention to key details like supply and sales volume, while also noting the macro economic picture.
If you’re planning on making a long-term purchase, however, your chances of selling at a loss are slim. While market corrections are painful in the short-term, homeowners who hold through market cycles often recover losses over time.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
StatCan (1); TRREB (2); CBC (3); CMP (4); Ontario Construction News (5); REMAX (6)
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Brett Surbey is a corporate paralegal with KMSC Law LLP and freelance writer who has written for Yahoo Finance Canada, Success Magazine, Publishers Weekly, U.S. News & World Report, Forbes Advisor and multiple academic journals. He and his family live in northern Alberta, Canada.
