WHAT IT WILL TAKE FOR THE RETURN OF THE CONDO.

Until recently, a condominium apartment in Toronto was a near-foolproof investment. And then came March 2020, and COVID-19.

Since the start of the pandemic, resale condos in Toronto and other Canadian cities have tended to stagnate in value, even as prices of other housing types have stabilized or surged. As the year ends, and with post-pandemic life in sight, real estate watchers are wondering: what will it take for condo markets to return to normal?

There are a few prevailing theories as to why many of Canada’s urban condo markets have struggled during the pandemic. All of these theories revolve around the ways COVID-19 has changed life in cities.

The collapse of the short-term rental market is one likely culprit.

“People had these investment properties that they were renting out as ghost hotels on Airbnb,” says Scott Ingram, a Toronto real estate agent. “And then all of sudden the pandemic happens and their revenue goes to zero. Then you get a flood of long-term rentals.”

While long-term rental supply was increasing, virus-related travel restrictions were decimating immigration to Canada, diminishing the pool of potential tenants.

And then there was the work-from-home factor, which may have caused some downtown dwellers to rethink plans to live, or continue living, in tiny apartments. In Ontario, as of 2017, the median size of a newly built condo apartment was just 665 square feet.

ERNEST DOROSZUK / POSTMEDIA Resale condos in Toronto and other Canadian cities have tended to stagnate in value since the start of the pandemic.