A Toronto one-bedroom condo just sold for $290,000 — is this a new low?

It was sold as a power of sale, meaning the lender took over after the original owner defaulted on their mortgage, said Alex Zhvanetskiy, a Toronto realtor and condominium specialist, who was not the listing agent. 

According to mortgage documents, the seller was the Canadian Mortgage and Housing Corp. (CMHC). CMHC spokesperson David Harris said they can’t comment on individual cases. But he said that in general, when a CMHC insured mortgage goes into default lenders can take possession of a property to sell themselves, or use CMHC for this. 

The price of the condo was adjusted five times, after being listed for $365,000 in March before finally selling for $290,000 in June, according to real estate company HouseSigma. 

“We call that bleeding it down,” said Zhvanetskiy.

“It sold way below even what other units have sold for in the building.”

Toronto’s ‘two condo markets’

Zhvanetskiy said he’s seen condos go for cheaper, recently, especially in buildings that have challenges with things like reserve funds.

These are pools of money set aside to deal with future repairs and maintenance, and if there isn’t enough, owners could be faced with unexpected costs. 

As for what it means for wider real estate trends in the city, he believes there are “two condo markets” right now.

There’s one for larger units that people want to live in, and another for “dog crate condos, which have bad layouts.” 

The Queensway condo has a long hallway that takes up a lot of living space. For this type of unit, this price point is maybe a bottom for the market, Zhvanetskiy said. 

These types of smaller condos with awkward layouts were marketed to investors during the city’s pandemic real estate boom, with the promise that prices would never stop rising. But demand has dried up and the market is now flooded with them.

“This is something that I don’t think people would really buy with the intention of necessarily living in themselves,” Zhvanetskiy added. Instead, he said they would try to get a tenant and maybe struggle to find a long-term one. 

Eventually as the market recovers, prices for this type of unit will rise, but later than other larger condos, he added. 

Helen Stopps, an architectural science professor at Toronto Metropolitan University, said she’s seen worse layouts. 

“It’s not awful, especially if you were a single person living there,” she said. 

But it would be tricky to fit another body into the space. 

There is, she noted, a small Juliet balcony, with windows that open for fresh air. But the unit lacks the outdoor space of a proper balcony. 

“I know people who have lived in probably similar apartments with a very small child, but I do think it would be extremely challenging,” she said.

The condo has little storage space, and seems to be on the second floor facing a busy street, which is “probably not ideal with acoustics.”

Jen Heakes, a realtor at Sage Real Estate in Toronto, said the Queensway condo is “a one-off” and “a huge deal” for a buyer. 

“It definitely shows that outside of the core it’s a little bit less insulated,” she said of the market, adding the big losses are happening when people have to sell, like in this case.

Otherwise owners are holding on, waiting for prices to go up.

Owner took a $168,000 loss

Property documents show the original buyer got the condo for about $458,000 in November 2023, so they took a loss of about $168,000 in under three years.

The sale reflects the double-edged sword of the market at the moment, Heakes said. There are great opportunities for buyers but sellers are hurting.

“The reality is that real estate has always kind of been this sure thing for Torontonians,” she said.

Owners are looking at “weathering the storm” for a year or two. But as the downturn persists, not everyone can hold on. 

“It breaks my heart, and I wish that it wasn’t the reality,” Heakes said.