Toronto Condo Investors Are Losing Money in a Bad Sign for Renters
- Most buyers who got mortages in 2022 have negative cash flow
- Investor pain tolerance depends on rates and prices, CIBC says
A condominium building under construction in Toronto.
Photographer: Cole Burston/BloombergThe majority of investors who took on mortgages in 2022 to pay for new Toronto condos have been losing money every month, a shift that could discourage future building in what is already one of North America’s tightest rental markets.
For the first time, more than half of investors who closed on a new condo unit with a mortgage in the Greater Toronto Area last year were unable to cover their costs when they started renting it out, according to a report Monday from Canadian Imperial Bank of Commerce and research firm Urbanation Inc. That’s because the monthly expenses, including mortgage payments, condo fees, and taxes, outstripped rents for most, forcing those investors to pay the balance out-of-pocket each month, the report found.