For the last two years, many prospective new-home buyers have been stuck in limbo: End-users waiting for better affordability, and investors wondering whether rental demand has peaked. At the same time, developers hold back new launches and struggle with what to do with unsold inventory.

This uncertainty is exactly what made Toronto Under Construction Episode 97 useful listening. I hosted an all-female panel featuring Sarah Segal (simplydbs), Jasmine Young (Zonda Urban) and Jane Renwick (RenwickCorp), and the discussion landed on a message that new-home purchasers and rental investors need to hear clearly: Today’s market isn’t “broken,” it’s resetting. The right move is not to predict a perfect bottom, but to buy with a strategy that survives multiple outcomes.

1. Demand hasn’t disappeared, but the market is digesting supply

The episode opened with a blunt framing: The region’s long-term need for rental housing remains large, even if near-term conditions feel softer. The panel discussed how recent increases in completed rental inventory, combined with more cautious immigration targets, has temporarily eased pressure in parts of the market. For buyers and investors, the takeaway is straightforward: Short-term softness can coexist with long-run undersupply. That matters because “soft” does not automatically mean “cheap,” and “tight” does not automatically mean “a great investment.” The panel’s point was more nuanced: A market can feel uncomfortable during lease-up surges and still be structurally undersupplied. If you’re buying new today, you should underwrite for realism in the first 12 to 24 months, but expect notable price growth in the final years of this decade.

2. The real risk is not pricing, it’s timing and absorption

One of the most practical themes in the conversation was absorption capacity. Even strong rental apartment buildings lease only so many units per month, and that becomes a constraint as projects scale up. Segal and Renwick emphasized that very large buildings may bring construction efficiencies, but they also create a lease-up reality where the building competes against itself for longer than most buyers appreciate.

For investors, this is a key underwriting adjustment: There will be condominium buildings that convert to rental tenure, but those buildings will be smaller than many of the large condo buildings we have seen in the past. The competition for an investor’s rental unit will be much lower in the future as fewer condo projects get built, and purpose-built rental projects are more conservatively sized for the reasons outlined above.

3. Midrise rental is not a vibe, it’s a risk-management strategy

I referenced the Sud Group’s “Sud Living” approach to midrise rentals, and the panel leaned into why that scale has become more attractive. Midrise projects often sit in the sweet spot: Large enough to support professional operations, but not so large that lease-up becomes a multi-year grind. You can build efficiently, maintain a coherent resident experience, and still stabilise within a timeframe that lenders can tolerate.

For new-home buyers, the implication is subtle but important. The market is gradually rewarding “right-sized” buildings and suites. Buyers should pay attention to the fundamentals that survive a reset: Functional layouts, durable finishes, livable storage and buildings that feel manageable rather than overextended. There will always be demand for highrise units with tremendous views, but an investor should also consider the stability of owning and renting out a larger unit with a tenant that intends to stay long term, avoiding turnover and re-leasing costs.

4. Incentives are everywhere, focus on effective value, not headlines

I highlighted lease-up incentives appearing across the market, and the panel discussed why inducements can distort what rents really are. One month free, gift cards, free internet, furnished suites… it all blurs the true number. Young’s market lens (from Zonda Urban) reinforces the discipline needed here: Incentives should be translated into effective rent and compared against real alternatives.

For prospective investors in the new condo market, it is critical to examine not just the headline rents at competitive rental buildings, but the rent net of incentives. If you’re looking for a cash-flow positive condo rental unit, comparing to the most expensive rental apartments must be done with the consideration of incentives, the greater security of tenure than a tenant receives, plus the on-site professional property management. The two final considerations come with a premium.

5. What buyers and investors should actually do right now

The episode’s subtext was disciplined decision-making. If you’re a new-home buyer looking to move into a new condominium yourself, prioritize:

A layout you can live in for longer than expected (because plans change and the market might not co-operate), a building with operational credibility and a high-quality developer, not just a glossy brochure, a location that holds demand through cycles (transit access, employment proximity, daily convenience).

If you’re an investor keen on renting the suite out, prioritise: Tenant-retention features (storage, parking optionality, predictable utilities), product that competes on livability, not just finish quality and buildings with realistic forecasted condo fees.

Episode 97 of the Toronto Under Construction podcast didn’t pretend the next 12 months will be smooth, but there are always opportunities and great deals in down markets.

Do your own research, surround yourself with an experienced team, and good luck.