Ontario Condo Prices Are Down 26–35%: What It Means If You're Carrying Debt

If you bought an Ontario condo near the 2022 peak, the math has turned against you. Nearly half of all condos in the province are now worth under $500,000, according to a June 2026 report from the Municipal Property Assessment Corporation (MPAC) — up from just 24% at the peak four years ago. In markets like Kitchener-Waterloo and Barrie, prices have dropped by more than a third.

For condo owners carrying significant debt, this isn’t just a paper loss. It changes what you can do.

How Far Have Ontario Condo Prices Actually Fallen?

Ontario condo prices fell 21–35% between the 2022 peak and mid-2026, depending on the market. According to data from the Canadian Real Estate Association (CREA), the declines have been steepest in markets that surged hardest during the pandemic buying frenzy.

Sources: CREA, June 2026; MPAC report, June 2026

The MPAC report, released in June 2026, also found that 16% of all Toronto-region homes — not just condos — are now worth under $500,000, up from 4% in 2022. Across Ontario, 24% of homes of all types are valued below $500,000 this year.

Greg Martino, Chief Assessor and Data Officer at MPAC, framed the shift this way in the June 24 release: “The past decade has reshaped Ontario’s housing market, and while prices remain elevated, there have been corrections from peak conditions. Our data highlights how trends vary across regions and property types, underscoring the importance of local insights.”

The cause is a classic supply-demand reversal. A flood of newly completed condo units entered the market just as buyer demand collapsed under high interest rates and economic uncertainty. Pre-construction and new builds compounded resale pressure in markets that already had thin buyer pools.

How Do Condos Compare to Other Ontario Property Types in 2026?

Condos have moved furthest toward lower price points, but all Ontario property types remain significantly less accessible than a decade ago, according to MPAC’s June 2026 data.

Source: MPAC, June 2026

Townhouses are notable: only 5% fall under $500,000 today, down from 69% in 2016. MPAC attributes this partly to townhouse concentration in the GTHA and to buyer preference — townhouses compete on size and space, sustaining demand even as prices have corrected.

What “Negative Equity” Actually Means for Ontario Condo Owners

Negative equity — being “underwater” on a mortgage — means your condo is worth less than what you owe the lender. It eliminates what most people treat as their biggest financial safety valve: the ability to sell.

Here’s what that looks like in practice: a condo purchased in Barrie in early 2022 for $600,000 with a 10% down payment left $540,000 owing. Four years of payments might bring the balance to roughly $510,000–$520,000. But if the unit is now worth $400,000, selling it produces a $110,000–$120,000 shortfall — money that does not disappear. It becomes a deficiency judgment, which the lender can pursue as unsecured debt.

For condo owners who bought near the 2022 peak in hard-hit markets, the question isn’t whether they’ve lost money. The question is what to do with the other debt — credit cards, car loans, lines of credit, CRA balances — that now can’t be paid off with equity that no longer exists.

What Are Your Actual Debt Options if Your Condo Is Underwater?

Your options depend on how much equity you have (or don’t have), whether you can still make mortgage payments, and how much other unsecured debt you’re carrying.

Option 1: Hold the Condo and Address Unsecured Debt Separately

If you can still afford the mortgage payments, a consumer proposal lets you settle unsecured debt — credit cards, personal loans, CRA debt — at a fraction of the balance, without touching the mortgage. You keep the condo. You stop the collection pressure. And you buy time for the market to recover.

Consumer proposals are filed through a Licensed Insolvency Trustee (LIT), a federally regulated professional under the Office of the Superintendent of Bankruptcy (OSB). The process typically offers creditors 25–50 cents on the dollar over up to five years, settled in full with no interest.

For a condo owner with $60,000 in credit card and line-of-credit debt who can still carry the mortgage, this is often the cleanest path — it doesn’t force a sale at the worst point in the market cycle.

Option 2: Sell Now and Accept the Loss

If you have enough equity to cover the mortgage payoff and selling costs, selling now eliminates the risk of further price declines and ends the monthly carrying cost. Selling costs in Ontario typically run 4–5% (realtor commissions plus legal fees), so you need enough equity to absorb that too.

This only makes sense if you believe prices will continue to fall, or if the monthly cost of ownership has become genuinely unsustainable.

Option 3: Negotiate a Mortgage Workout With Your Lender

If you’re behind on payments, most Canadian lenders — including the major banks and credit unions — have mortgage assistance programs that can defer payments, extend amortization, or temporarily reduce the payment amount. These are not advertised prominently, but they exist. You have to call and ask.

A workout doesn’t solve negative equity, but it buys time without triggering power of sale.

Option 4: Power of Sale (What Happens When You Don’t Act)

Power of sale is the Ontario process by which a lender can sell your property after you default. Unlike foreclosure in some other provinces, power of sale does not cancel your debt. The lender sells the property, applies the proceeds to what you owe, and any shortfall becomes a personal liability you still owe.

In a falling market, this is the worst outcome: you lose the asset, absorb all selling costs, and still owe the deficiency. It is the scenario that all other options exist to avoid.

Which Ontario Condo Markets Are Hardest Hit?

The 2026 MPAC report does not break down results by municipality, but CREA data points to the 905/519 belt — the ring cities around Toronto — as the worst-affected markets. These areas saw the most speculative buying during 2021–2022 and have had the weakest recovery in buyer demand.

Toronto proper has held up better — the GTA condo market is still above the $500K median — but is still down from its 2022 peak, according to MPAC. Within the GTHA, every municipality except Oshawa still has a median home value above $750,000. However, the ultra-premium segment has corrected sharply: Oakville, Richmond Hill, Caledon, Vaughan, Markham, and Aurora each had more than 30% of homes valued above $1.5 million in 2022; by 2026, those proportions fell 22–65%.

Communities in the GTHA where the share of homes under $500,000 has more than doubled since 2022 include Whitby, Ajax, Clarington, Halton Hills, Bradford West Gwillimbury, Brampton, Oshawa, and Newmarket.

Not Every Ontario Market Is Declining: Northern and Eastern Ontario

The provincial narrative obscures a counter-trend in northern and eastern Ontario, where lower-priced homes are actually disappearing. In Sault Ste. Marie, the share of homes valued under $250,000 fell from 75% in 2016 to just 22% in 2026. In Greater Sudbury, that figure dropped from 50% to 2% over the same period. Median values in both cities rose $45,000–$57,000 since 2022. Eastern communities including North Stormont, South Stormont, and North and South Glengarry recorded increases in the $50,000 range.

If you own property in these markets, the equity-negative scenario described below is less likely to apply — your challenge may be the opposite.

The Debt Problem Hidden Inside the Price Crash

The price crash has an indirect debt effect beyond mortgage equity. Many Ontario condo owners used HELOCs (home equity lines of credit) during the 2020–2022 boom to access rising equity. A condo that went from $400,000 to $700,000 in two years unlocked six figures of credit that people used for renovations, cars, vacations, or other investments.

That equity has now reversed. The HELOC balance remains. The collateral that backed it has shrunk — sometimes below what’s owed. Lenders can and do reduce HELOC limits when assessed property values fall, sometimes without warning. Owners who were counting on that credit line as a cash buffer are suddenly without it.

If you’re in this position — a shrunken condo value, a HELOC that’s been cut, and credit card debt you were planning to manage with equity you no longer have — you’re dealing with a compounding debt problem, not just a real estate problem.

What to Do Right Now

1. Get a current market valuation. Don’t assume your condo is worth what Zolo or Realtor.ca shows. Have a realtor pull recent comparable sales in your specific building and street. MPAC assessments lag the market; actual transaction values are what matters.

2. Calculate your equity position. Outstanding mortgage balance + HELOC balance vs. net sale proceeds (estimated value minus 5% selling costs). If the result is negative, you have no equity exit.

3. List all unsecured debt separately. Credit cards, personal loans, car financing, CRA balances. This is the debt a consumer proposal can address without forcing a condo sale.

4. Talk to a Licensed Insolvency Trustee before the mortgage gets behind. The best time to file a consumer proposal is while you’re still current on the mortgage. It stops unsecured creditors, eliminates interest, and preserves the condo. Once you fall behind on the mortgage, the calculus changes significantly.

Initial consultations with LITs are free, and they’re required by federal regulation to give you an honest assessment — including if the proposal doesn’t make sense for your situation.

The condo market correction is real, broad, and ongoing. But the debt decisions you make in the next six months will matter more than wherever prices settle.