They were once a golden ticket.
These days they’re more like the slightly rotten apple sitting on the shelf.
Over the last few years, condo buyers have been trying to off-load thousands of contracts for preconstruction units, hoping to sell them to someone else before being forced to close.
But they’ve found few takers, despite deep discounts.
However, some realtors say, there is one somewhat surprising group that’s starting to snatch up these listings, known as assignment sales. Private equity and investment funds are betting that things will turn around in a few years, a sign the market may be at or near the bottom.
“There’s a lot of funds that we work with, like equity funds, and they’re buying them in bulk,” said realtor Jonathan Zadegan, managing partner at the Zadegan Group.
“They’re buying them, they’re renting them out, they’re keeping them until 2030, 2031 and they’re flipping them.”
Preconstruction condo buyers sign contracts agreeing to purchase units once buildings are finished, typically about five years out, and have to qualify for mortgages before closing on the deal.
This was once cheaper than buying comparable resale units, given the risk of purchasing something that didn’t yet exist.
But speculation drove up prices so high that near the height of the Toronto real estate market in 2022, preconstruction units were 40 per cent more expensive than recently built ones already on the market, according to Urbanation.
Many people got rich buying and reselling the contracts at higher prices before the units closed, counting on real estate values always going up. Until higher interest rates and lower prices tanked that model.
According to data from Altus Group, released by the Building Industry and Land Development Association (BILD), the price of a new condo in the Greater Toronto Area has dropped from $1.18 million at the market peak in February 2022, to $1.02 million as of December 2025.
Despite falling prices, 2025 was the worst year on record for new home sales in the 45 years since the data has been collected. Just 5,300 sold across the region.
And according to the Toronto Regional Real Estate Board (TRREB), the average resale condo in the GTA was just under $800,000 in February 2022, and around $630,000 in December 2025.
This leaves preconstruction buyers willing to take big losses, and even walk away from hundreds of thousands of dollars in deposits.
For example, a recent three-bedroom unit in “The Goode” condos at Parliament and Front streets was advertised in a Facebook group for assignment sales at a $300,000 loss.
Enter private equity and investment funds. These funds are “forecasting a five-year exit” to the condo market downfall, Zadegan said. “So they’re looking to buy deals today.”
Although, he added, “it’s a smaller percentage typically of what they own,” in general.
It’s hard to find numbers on assignment sales as they are typically not done through the Multiple Listing Service (MLS) system. But Harley Nakelsky, president and partner at Baker Real Estate Inc., said he’s also seeing investment funds buying up these condo contracts.
“A lot of people are making the long bet,” he said.
“I do think if you’re buying today, you’re looking at a three-to-five-year horizon to make substantial money.”
Family offices, which manage finances for wealthy families, are looking at this as well, Nakelsky added.
He’s also seeing more informal groups buy these units.
“We’ll call them mini-funds, where five or 10 guys will get together and take down 20, 30, 50, units, whatever it is, and they’ll have a game plan,” he said.
“Every game plan is different.”
Some buyers think the recovery will be five years, some two years.
Some are buying bigger units, some small.
“It really varies, and everyone’s got their own theory as to where the world’s going to be,” he said.
Nakelsky said sellers are willing to abandon some or all of their deposit, just to close the deal, and prices have already come down substantially from the peak.
It’s harder to get a mortgage than it was a few years ago, unemployment is higher, there’s uncertainty around trade deals with the U.S., he said.
“People are just nervous, and so people don’t obviously want to close on what they have.”
Pauline Lierman, vice-president of market research at housing data platform Zonda Urban, said she has heard of investment funds buying assignment sales.
In general, though, new condo units aren’t moving because prices are still too high for buyers.
“There’s a bit of a push-pull type of signal right now. There’s interest, but (developers) can’t sell them,” she said.
But, Nakelsky said, this is the “most active” he has seen these investment funds and informal investor groups in the past couple of years.
“What I think that means is people have realized we’re probably closer to the bottom than we ever have been,” he said.
“When is it going to come back? I can’t tell you. But I can tell you, it’s not back yet.”
