There was a time when investing in a condo—or a plex like a duplex or triplex—felt like a guaranteed win. Property values climbed, rents rose, and buying pre-construction meant locking in at today’s prices while profiting before the building was even complete. Those days, for now, are largely behind us.

Of course, some investors argue this could be the best moment to jump back in—like buying a stock when it’s down. Others, particularly non-investors, may see this slowdown as welcome news. After all, Toronto has long wrestled with the fact that too many people own two or more properties, while others struggle to buy just one. Fair point.

Still, investors rarely get credit for their role in shaping the city’s skyline. Without them, a huge portion of Toronto’s condo supply simply wouldn’t exist. After the early ’90s downturn, developers were required to pre-sell 70% of units before a shovel could hit the ground. It was a safeguard to prevent bankruptcies—but it also made investors essential. For decades, they’ve been the ones helping projects cross that 70% threshold, leading to the thousands of homes we see today. Over time, buildings typically balance out, with a majority of owners eventually living in their units and a smaller percentage remaining rentals.

That said, not all of those units were exactly what Toronto needed. Investors drove demand for small, efficient bachelor units—great for short-term living or renting, but not for families or anyone craving space. The result? Too many micro-condos under 350 sq. ft., and not enough homes built with long-term living in mind.

Now, investors have all but vanished from the pre-construction scene. Without them, many projects can’t get off the ground, and the pipeline for future housing supply is at risk. Prices may be slightly softer, but rents have also cooled, leaving many investors squeezed.

Part of this shift comes down to government policy. With the best of intentions—but sometimes clumsy execution—new rules have made investing less appealing:

• Foreign buyer taxes: The federal government slapped a 25% tax on international buyers, with Toronto adding another 10%. While this helps keep prices in check for locals, it also slams the brakes on new condo projects. If fewer buyers step up, fewer condos get built—shrinking future supply.

• Tenant/Landlord Board delays: If a landlord does run into trouble, hearings can take 6–8 months to schedule, often leaving them without rent in the meantime. Yes, bad landlords need accountability—but delays this long tilt the system so heavily that even good landlords think twice about staying in the game.

• Renoviction bylaw changes: As of July 31, 2025, landlords must apply for a license to renovate a tenanted unit. The intention—preventing shady “renovictions”—is solid. But in practice, it creates a near-impossible process: paying for tenants’ temporary housing, filing endless permits, and then welcoming tenants back at the same rent. For many small landlords, the math simply doesn’t work, so renovations stall. And stalled renovations aren’t great for tenants, either.

To the city’s credit, purpose-built rentals are finally making a comeback. That’s a step in the right direction. But the pace still falls far short of what’s needed, and discouraging small and mid-sized investors risks pushing the rental market further into the hands of large corporate landlords.

Here’s the truth: housing in Toronto has always been built on a mix of incentives, pressures, and imperfect systems.

Whether it’s condos funded by investors or transit lines rushed to meet deadlines for global sporting events, progress often comes from pushing one thing to make another happen. Take the PanAmerican Games here in Toronto in 2015. They UP Express would not have been built if it did not piggyback on the infrastructure needed to do these Games.

What we really need now is a sharper focus on building more—faster. If governments concentrated on speeding up approvals, encouraging diverse unit sizes, and reducing red tape (without ignoring tenant protections), both tenants and buyers would benefit. Supply, at the end of the day, is what drives affordability.

Investors aren’t the villains of Toronto real estate. Tenants aren’t, either. The real challenge is finding the balance that keeps both sides in the game—while getting shovels in the ground to deliver the homes Toronto so badly needs.