You bought your condo in 2021, confident you’d sell it in five years, pocket the profit, and move into a house. That’s how it always worked, right? But here’s the thing: thousands of Canadian condo owners who bought during the pandemic are now facing a tough reality. Their properties haven’t gained value. Some have lost it.
The old rule — hold real estate for five years and you’ll make money — isn’t holding up anymore. And if you’re one of those owners, you’re stuck with three lousy options: sell at a loss, rent it out in a brutal market, or delay your life plans and wait.
Why Are Pandemic Condo Buyers Losing Money?
Canadian condo values surged during COVID-19 as buyers rushed into the market with low rates and remote work flexibility. Many first-time buyers in their late 20s grabbed condos as starter homes, planning to flip them within five years.
But the market shifted. Interest rates climbed from 0.25% in early 2020 to 5% by mid-2023. That crushed affordability and cooled demand, especially in Toronto and Vancouver. According to data from the Canada Mortgage and Housing Corporation, housing values across Canada fell by 2% in January 2025 compared to the year before.
Toronto realtor Anya Ettinger sees it all the time. “A lot of people were buying condos in their mid-to-late 20s,” she says. “The plan was always: let’s wait five years and sell our condo and buy a house. The life plan hasn’t changed… the market has.”
What Are Your Options If You’re Underwater on Your Condo?
If your condo’s worth less than you paid, you’ve got limited choices. None of them feel great.
Sell at a loss. You’ll take a financial hit, but you’re out. If you bought for $650,000 and it’s now worth $600,000, you’ll lose $50,000 plus closing costs. That’s painful, but it frees you to move on.
Rent it out. Sounds smart until you realize Toronto’s rental market is flooded with condos. You might not cover your mortgage, let alone property taxes and condo fees. You’re bleeding cash every month.
Wait it out. This means postponing life plans — marriage, kids, moving to a bigger place. You’re gambling the market rebounds soon. It might. Or it might not.
Real talk: none of these options are easy. But pretending the problem will fix itself won’t help either.
How Are Other Canadian Housing Markets Performing?
Not every market is struggling. Quebec City saw a 14% increase in housing values year-over-year in January 2025, making it Canada’s strongest market right now.
But Toronto and Victoria? They’re among the weakest. Lower interest rates throughout 2024 didn’t provide much relief. Valuations kept falling.
The gap between cheaper and more expensive cities is widening. If you’re in a pricey market like Toronto or Vancouver, you’re likely feeling the pinch more than buyers in affordable regions.
Should You Still Think of Condos as Investments?
Here’s where the conversation gets real. Homes — condos included — were never meant to be purely investments. They’re places to live.
“It should never have been the norm,” Ettinger points out. Treating your home as a guaranteed money-maker creates unrealistic expectations. And when the market doesn’t cooperate, you’re left holding the bag.
That doesn’t mean you shouldn’t consider resale value when buying. But banking on quick profits? That’s risky. Especially in uncertain markets.
If you’re thinking about buying a condo today, make sure it fits your life for at least 7-10 years. Don’t count on flipping it in five.
Frequently Asked Questions
What is the 5-year rule for buying a condo in Canada?
The 5-year rule is the old belief that holding a property for at least five years guarantees a profit. That assumption is being tested as many pandemic buyers face stagnant or declining condo values in cities like Toronto and Vancouver.
Can I rent out my condo if I can’t sell it for a profit?
You can, but Toronto’s rental market is flooded with condos, and you may not cover your mortgage and fees. Many owners end up losing money monthly, especially if they bought at peak prices during the pandemic.
Which Canadian cities have the strongest housing markets in 2025?
Quebec City leads with a 14% year-over-year increase in housing values as of January 2025. Toronto and Victoria, on the other hand, are among the weakest markets with declining valuations despite lower interest rates.
How much have Canadian home values dropped recently?
According to CMHC, housing values across Canada declined by 2% in January 2025 compared to the previous year. The drop is more pronounced in expensive markets like Toronto and Vancouver.
Should I wait for the market to recover before selling my condo?
Waiting means postponing life plans and gambling on a rebound. If you need to move on — for family, work, or financial reasons — holding out may cost you more in the long run than selling at a loss now.
Not Sure What to Do With Your Condo?
Whether you’re thinking about selling, refinancing, or buying your next home, we’ll connect you with a mortgage expert who understands your situation. No pressure, just clear advice tailored to your goals.
