The fail

One day in the misty past, four years ago, a confident soul wrote a cheque for $179,986 and secured a unit in the awesome, yet-to-be-built Narrative condos, on Toronto’s eastern flank.

The purchase price: $1.2 million, for 1,172 square feet of space, into which were to be crammed three bedrooms and three bathrooms.

Here is the story on the building: “The Narrative Condos by Crown Communities offers contemporary living in Toronto’s scenic Rouge neighbourhood, where urban convenience meets the calm of nature. Surrounded by lush parklands, the Rouge River, and Lake Ontario, residents enjoy easy access to trails, waterfront views, and top local amenities including Scarborough Town Centre, the University of Toronto Scarborough campus, and nearby transit options like Rouge Hill GO Station and Highway 401.”

And these are the goodies the purchaser looked forward to, plus a parking space and a locker:

Concierge, Games Room, Party Room, Business Centre (WiFi), Visitor Lounge, Outdoor Patio, Yoga Studio, Outdoor Child Play Area, BBQ Permitted, Indoor Child Play Area, Coin Laundry, On-Site Laundry, Storage, Dining Room.

Condo fees – $800 a month. Cash due on closing: about $1.1 million. Closing date: two weeks from this Friday.

The Narratove Condo, Kingston Rd. Toronto.                                      Source: assignmentplus.ca

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Well, closing may not happen since the unit now sits on the desperation-drenched assignment market. And it’s not worth $1,200,000 any more. The asking price is $999,000, or about 17% less than when the offer was signed.

But wait. There’s land transfer tax involved, plus the assignment seller will have to fork over $50,000 in commission, plus legal fees. The real-world loss will be in excess of 20%, plus four years of zero growth on the deposit of almost $180,000.

The assignment market – where original purchasers sell their contracts, or right to buy real estate, to a second party – is bursting with listings. These are brand-new units in swishy new buildings which looked like great deals when FOMO gripped the land, real estate always went up and mortgages were 2%. Added to the mix in this one market (the GTA) alone are 21,000 more new condos and singles which have not yet found buyers. Plus almost 30,000 resales.

Remember those days a few years ago when this pathetic blog forecast a slow melt in prices and the steerage section cried, “If prices ever go down 15% there will be a stampede to buy…”?

Well, here we are. And no stampede. Not even a scamper. Turns out we don’t like buying stuff that’s cheaper, because it may get cheaper still. But we do love grabbing things on the rise because, you know, they’ll go up forever.

Like the dude who signed for this three-bedder, “in the calm of nature”, this is why most people buy high and sell low – then find someone else to blame. The government. Immigrants. Realtors. George Soros. Boomers.

So, is the turmoil and tragedy of the assignment market reflective of what’s happening everywhere with real estate? Are we at the bottom? The middle? Or just starting into a generational price collapse?

Let’s get some non-realtor economic perspective.

Here’s RBC’s chief housing guru, Robert Hogue. He ain’t worried. “The ride has been bumpy this fall, but Canada’s housing market is still on the road to recovery,” he says. “Monthly gains in resales and prices in October, and signs supply is stabilizing in parts of the country represents progress after a setback in September.”

House sales roller-coaster stabilizing

Source: RBC Economics

A pair of Bank of Canada rates cuts unlocked demand that built up during the CB’s fight with inflation, he figures. But now available inventory has stabilized, “suggesting risk of severe oversupply is contained in markets like Toronto and Vancouver.”

And what about prices? More drops to come?

Hogue futzes around on that one: “We think it’s still too early to determine whether they represent a sustained inflection point, or a temporary pause in a broader downtrend.” But at the same time the country’s biggest bank is suggesting next year looks better. Sorta.

Developments this fall appear broadly consistent with expectations for a gradual recovery in 2026, supported by lower interest rates, improving job prospects, and rebuilding confidence.

However, several factors will constrain the pace of recovery including affordability challenges in several major markets, and reduced immigration demand from historical trends. Additionally, persisting economic uncertainty and the risk trade war escalation could generate some volatility and disrupt the recovery.

Over at BMO… “We’re seeing sales volumes at very ‘normal’ levels, mortgage rates back around neutral and national prices very stable,” says economist Robert Kavcic.

The bank is also telling people to get used to current mortgage rates. That big chop is not coming. “Market pricing currently has the Bank of Canada on hold at these levels through 2026; and our year-end 2026 call for 5-year yields leaves little downside for 5-year fixed mortgage rates,” says Kavcic. “In other words, barring an economic or inflation surprise, these are about the borrowing costs that the market will have to price itself off.”

So, prices down by a fifth. Interest rate cuts over. Sales ticking higher. Inventory ticking lower. And motivated sellers begging you to buy.

It could be a generational opportunity. Like the real estate plop of ’92. Or it may be a trap. Like in ’21.

We’ll let you know.

About the picture: “Thank you Garth, thank you. I have been reading your blog for years and even have the next generation following,” writes Jeanne.  “Great service for all of us but especially useful for the younger folks. This is a picture of Poppy who died Monday night at the age of 15. Poppy lived in Dublin . She was the best dog ever and will be hugely missed.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/11/19/the-fail-4/