Real estate investing, like any other kind of investing, is a game of strategy. It is not just about knowing what makes a good property to buy: it is about knowing when to sell it too. If you are asking yourself, “should I sell my investment condo now?”, the answer is: the right time looks different for everyone. It depends on your financial goals, local market conditions, and the cost of missed opportunities elsewhere.

This blog is a crash course in what our current condo market looks like, as well as what are some of the reasons to sell or hold an investment condo in 2026. The topics below are the most common discussions we have with investor clients, if you would like to discuss your options through with a professional, reach out to us.

Reality Check: Our Current Condo Climate Isn’t Good (As of Mid-2026)

It is no secret that condo values have had a rough few years. Prices peaked in 2022 and has been in a downward trend ever since. As of mid-2026, GTA condo prices are still falling, with prices now over 9% lower from this same time in 2025, even though freehold homes have started their recovery. Because there is so much inventory of unsold condo units, many banks suggest prices might only recover in 2028, which would mark a 6 year downturn.

At the same time, rent has been steadily dropping as well.

To top it off, being a landlord in the GTA is becoming harder. The LTB is tenant-biased, so if you happen to get a bad tenant, it can take months of time, and tens of thousands in lost income and legal fees.

Condos Are Inherently A Volatile Real Estate Investment

Unfortunately, because of their low maintenance and low entry cost, condos are the most popular real estate investment. But that also means when real estate faces uncertain times, it becomes the most oversold real estate asset. (Because investors are willing to sell their investment condos, but they have to keep their family homes). And the more active sellers, the more downward pressure we see in prices…

The second underlying issue plaguing our condo market is the fact that investors buy units that are cash-flow negative. (Ie they lose money every month after collecting rent and paying their mortgage, taxes, maintenance, and other expenses). They buy these units because they anticipate the condos to appreciate (like the double digit growth we experience in hot markets), but when the market drips, they are stuck paying monthly out of pocket, while also losing equity.

 

What Is Your Equity in the Property, and Could It Work Harder Elsewhere?

The minimum down payment on an investment condo is typically 20%. Any amount above that reduces your mortgage payment, but it is also capital that could be deployed elsewhere. Here is the part most investors don’t revisit after their initial purchase: as the property appreciates, the equity sitting inside it grows too, and most investors never go back and ask whether that equity is still working as hard as it could be.

Example: Say you bought a condo 5 years ago for $400,000, and you placed a $80,000 downpayment (20%). If that condo has since appreciated to $600,000, and you have paid down some principal along the way, your equity in the property could easily have grown to $300,000 or more. That is not the $80,000 you started with: it is real capital sitting inside a single asset.

The question worth asking isn’t, “was this a good investment?” It clearly was a worthy investment. But the better question to ask is, “is there a better use today for my total equity?”. When you brought the property, you took $80,000 and grew it to $300,000. That’s a massive 375% return. But for your $300,000 of equity in the property to see the same growth, you’d need the condo to climb to $1,445,000.

This is where most residential real estate investors miss out. They look at the original purchase price, and mortgage, and they can see it was a great purchase. But they do not take the next step towards thinking about the equity in the property vs its current value, and how much more appreciation they can get out of the property.

Two Numbers Worth Calculating

1. Rental income vs. carrying costs: This is essentially your condo’s profit-and-loss statement. If your unit rents for $3,000 a month, but you are spending $3,500 a month on your mortgage, condo fees, taxes, and insurance combined, you are running a $500-a-month loss before you have accounted for vacancy, repairs, or your own time.

2. Return on the equity actually invested: If you owned a stock, you would naturally compare its price to the yield or dividend it produces. Do the same math on your condo. Take your current equity (current market value minus what you still owe) and compare it to your actual net income after all expenses. If that return is low relative to what the same capital could earn elsewhere, even in a conservative alternative, it is worth taking seriously.

 

Hidden Variables: Tenants, Income Taxes, Capital Gains Tax, and Friction Costs

Before deciding whether you should sell your condo, you need to run the full financial picture. Cashing out real estate isn’t as simple as subtracting your mortgage balance from the sale price. Three major factors can dramatically change your bottom line.

1. The Tenant Factor (Ontario RTA Rules)

In a soft market, whether your condo is vacant or tenanted can make or break your sale price.

• You cannot evict just to sell: Under Ontario’s Residential Tenancies Act (RTA), selling a property is not legal grounds for eviction.

• The buyer pool problem: In today’s market, other investors are hesitant to buy, meaning the vast majority of active buyers are end-users who want to move in themselves.

• Selling tenanted properties to end-users is very risky. While you can serve a tenant notice via an N12, the form is just a notice to leave, it does not guarantee the tenant will move out. If the tenant challenges the notice in court, it can delay their move out by months, and potentially derail the whole transaction. So end-users are usually looking for a discount when buying tenanted properties.

• If your tenant has moved out, this is usually the best time to get maximum value for the property. Repairs can be done, staging can be done, and you can offer the buyers flexibility in closing. This makes a meaningful difference to buyers who are considering a few different condos, but some of them have tenants.

2. Tax Realities (Income Taxes and Capital Gains)

Income earned from an investment property is taxable income. That’s why most accountants advise their clients to mortgage the property to a point where the income earned is equal to the expenses on the property, or to run the property at a slight loss. If you’ve paid off a significant portion of your investment property, it may be worth while re-mortgaging it so that you’re not paying income taxes on the net income after expenses.

Selling a non-principal residence triggers capital gains tax.

After selling an investment property, you will owe capital gains tax. And depending on your tax bracket, that capital tax bill can be quite hefty. A $100,000 profit for an individual earning $100,000 annually comes to a tax bill of $20,000.

3. Carrying An Older Condo Comes With Higher Maintenance Fees

As condos age, years of underfunding can quickly catch up and significantly impact the financial health of the building. And while a status certificate might show a reasonable balance in the reserve fund, often times the status certificate does not show the whole health of the building. If you’re uncertain about the financial health of your investment condo, and you’re a hands-off owner, you’re placing your financial stability in the hands of the condo board. Condo boards are composed of residents in the building, and sometimes condos get lucky and they have experienced, diligent people who become the board president, treasurer, and secretary. But sometimes the condo board consists of residents who don’t have a solid understanding of construction, maintenance, or finance.

When Selling Might Make Sense

• You are facing real financial strain, and the property is a cash drain rather than an asset.

• You have identified a better opportunity for that capital elsewhere.

• You believe the condo market will stay depressed for an extended period.

• You have personal circumstances forcing the decision.

• You need to access your equity now for reasons unrelated to the market itself.

When Holding Might Be the Smarter Play

• You have strong holding power and are not under financial pressure.

• Your unit is still cash-flow positive, or very close to it.

• You believe in a medium-term recovery and can easily ride out the downturn.

• You are prepared to make improvements or cosmetic updates that could meaningfully increase the unit’s value or rentability.

Is There Reason to Believe in a Recovery in 2028-2029?

We think so, eventually, if not by the end 2029, soon after then. All real estate markets are cyclical. The condo market peaked in 2022 and began its decline once interest rates climbed through 2023. It softened further into 2025 due to a mix of economic uncertainty, cooling immigration targets, and fewer international students choosing Toronto. 2026 saw further economic uncertainty, leading to softer rents and more price losses.

On the supply side, developers have pulled back sharply. 2025 saw the fewest new condo sales in over 30 years, and early 2026 saw quarters with effectively no new condo project launches at all. Existing buildings remain unsold, and at the current rate of sales, there’s almost 100 months worth of unsold new-construction inventory.

That preconstruction pullback matters. Fewer new projects launched today means a real supply gap several years down the road once current inventory is absorbed. Combined with Canada’s ongoing population growth and housing shortage, the setup for a medium-term recovery is there.

Markets also recover in a cyclical fashion. At the first sign of improvement, investors who are holding on waiting for a recover list their properties, and the market gets flooded, and prices drop. A true recovery will consist of a few rocky ups and downs, but the overall trend will be upwards.

The Bottom Line

Deciding whether is now a good time to sell an investment condo is a deeply personal choice, and there is no single right answer. In this market, realism matters far more than optimism. Don’t anchor your expectations to what a similar unit sold for back in 2022, or even 2025. Prudent investors often review their holdings to see whether to make a shift, and real estate shouldn’t be any different. You don’t have to make the decision yourself, a good accountant can explore what makes financial sense to you. And while an accountant’s opinion is paramount when reviewing your options, don’t forget you also need a skilled realtor to get a condo sold in today’s market. If you want help running the numbers on your own condo, please reach out to us: contact us