The condo market is struggling. Are they still a good retirement plan?

Condos were once considered a safe investment for people planning their retirement, but Canadians are increasingly wary of investing in condos.

In early 2022, it looked like Canada’s condo market would never slow down. For older buyers with a little extra cash in hand, buying one may have seemed like a smart way to set themselves up for retirement.

Three years on, experts warn that the condo crash makes these units a bad investment — especially if you’re planning to use them as a nest egg.

According to Statistics Canada, nearly two in five condominium apartments (38.9 per cent) in Toronto in 2022 were investment properties, while this was the case for about one in three (34.2 per cent) in Vancouver.

In addition to having a lower entry point for first-time homebuyers, the condo market made it easier to make a quick buck with rental income.

But Canadians are increasingly wary of investing in condos, research shows.

A survey conducted by Leger for Rates.ca found that 30 per cent of Canadians said condos were once a good investment but no longer hold the same appeal. Only 11 per cent said they would buy a condo as an investment, while 57 per cent stated they would not buy a condo for any reason.

The condo crash is particularly sharp in Toronto, once one of the hottest condo markets in North America.

A July report by Urbanation found that condo inventory in the Greater Toronto and Hamilton Area rose to record highs after sales dropped 69 per cent compared to the same period last year.