Every time the market shifts, the headlines get simpler, and the reality gets more complicated.
So instead of guessing, I sat down with Nick Karadza of Rock Star Real Estate, someone who’s been in the mom-and-pop investing world for well over 20 years, to get the real, on-the-ground read on where things stand right now.
Here’s what he had to say.
The Market Is “Choppy”: Not Crashing, Not Booming
The first thing Nick pushed back on: you can’t paint the Canadian real estate market with one broad stroke. What’s happening in Alberta looks nothing like BC. What’s happening in Kitchener-Waterloo looks nothing like Toronto. And within Toronto itself, the low-rise market and the condo market are living in two completely different realities.
Low-rise, starter-home segment: Well-priced bungalows and townhouses outside the core are seeing real demand. Some are getting multiple offers, occasionally as many as 15. But don’t confuse that with the frenzy of a few years ago. Properties listed low to generate interest are still selling roughly at market value, not $150–200K over asking the way they might have during the boom.
The Toronto condo segment: This is where the weakness is concentrated. A supply glut has built up over the past year and a half. In some buildings, there are hundreds of nearly identical units, which makes it hard for any single seller to differentiate their unit. That’s created real downward price pressure.
Interestingly, Nick flagged something unexpected: even though a wave of new-construction closings has been hitting the market, it hasn’t dramatically increased the number of active listings the way many expected. Some of that new supply is being absorbed faster than anticipated, a dynamic he says has caught a few people off guard.
Local Investors Are Splitting Into Three Groups
Nick’s read on investor behaviour right now breaks into three camps:
1. Long-time investors with significant equity: They’re doing fine. Time in the market has worked in their favour.
2. Investors who refinanced repeatedly during the low-rate years: This group is often cash-flow negative now, and not happy about it. But Nick’s point here is blunt: if you pulled $500,000 out of a property through refinancing, you can’t just focus on the negative cash flow without asking where that $500,000 went. Many homeowners and investors used their properties as ATMs during the cheap-money years, and the bill for that has come due now that appraisals are lower and liquidity is tighter.
3. New investors entering now: This group is finding better math than they saw a few years ago: lower prices, rates down from their peak, and rents that have generally held steady or ticked up slightly. The numbers “actually start to make sense again,” in Nick’s words. The catch? Many are hesitant to pull the trigger because there’s no urgency pushing them. There is no fear of missing a rate window and no fear of prices running away from them. So a lot of capital is sitting on the sidelines, watching.
Why a Shrinking Population Might Actually Be Healthy
One of the more surprising parts of the conversation: Canada’s population growth has gone negative, meaning we’re losing people year-over-year. Nick views this as a good thing, not a warning sign.
His reasoning: the immigration surge of the past few years, driven largely by international students and non-permanent residents through private institutions, outpaced the country’s ability to build supporting infrastructure. Schools, roads, and hospitals didn’t keep up, and the strain showed. He expects the government to eventually loosen immigration policy again for economic growth reasons, but sees this pause as a necessary reset rather than a long-term problem.
What Would Actually Turn the Market Around
According to mortgage brokers Nick’s been talking to, the trigger isn’t complicated: one or two interest rate cuts that bring rates durably below 4%. That’s reportedly the point where phones start ringing. Beyond that, he thinks general economic certainty, including possibly more domestic infrastructure investment, would do more to restart the market than any single policy change.
Worth noting: Canada is technically in a recession right now, which Nick isn’t shy about naming plainly.
First-Time Buyers Are the Strongest Segment, But There’s a Catch
Right now, the biggest pocket of demand is coming from first-time buyers. That’s a genuinely encouraging sign. But there’s a less encouraging trend hiding inside it: the median age of a first-time buyer has climbed from the mid-30s to about 40. Nick flags this as a concerning long-term pattern for society, even while acknowledging it’s good news for the market in the short term.
Missing Middle Housing: “I Think It’s Awesome”
We also touched on missing middle housing: duplexes, triplexes, and small multiplexes that sit between a single-family home and a full apartment building.
Nick is genuinely positive on this trend, for a few reasons:
- It builds community. Families need more space than a 600-square-foot condo can offer, and missing middle housing gives them room to grow without needing a detached home.
- It’s a response to a real problem. Families with kids have been leaving cities in large numbers, largely because there’s nowhere affordable for them to live once they outgrow a small condo. Missing middle housing is one of the few realistic ways to keep families in urban areas.
- The economics work, arguably better than they used to. Nick pointed to a simple but important idea: multiple units under one roof means shared major systems and fewer duplicated costs, compared to owning several standalone single-family rentals. That’s economies of scale working in the investor’s favour.
He also noted that the numbers on these projects make more sense today than they did when missing middle development first started, thanks to falling interest rates, lower property values, and cities like Toronto waiving development charges on qualifying projects. That combination is why more investors and developers are returning to build these in Toronto specifically, after a stretch where almost nobody was.
The Philosophy Behind It All: Time *In* the Market, Not Timing It
Nick closed with what he considers the single most important lesson from over 20 years of investing, one he says applies to every asset class, not just real estate:
The most successful investors take the long view. They form a thesis, commit to it, and stay the course rather than reacting to short-term headlines or emotional swings. He’s watched investors want to sell a property in a moment of frustration, whether because of a bad tenant or a bad month, only to be grateful later that they held on.
His advice for anyone currently on the fence about an underperforming property: it’s just an asset. There’s no universally right answer for every investor, but if a property genuinely isn’t working, financially or for your peace of mind, it’s not a lifelong commitment. You can always buy another one. What matters more is protecting your downside: giving yourself enough of a cash flow cushion that you’re making decisions based on logic, not panic, when the next bump in the road shows up.
Final Thoughts
The honest version of today’s market: it’s genuinely mixed. Some segments are healthy, some are still working through oversupply. Some investors are hurting from decisions made years ago, and others are finding real opportunity for the first time in a while.
If there’s one takeaway from Nick’s read on things, it’s this: the investors who do well aren’t the ones calling the bottom or the top. They’re the ones who understand what’s actually driving the market beneath the headlines, and who built enough cushion into their portfolio to make calm decisions when things get uncomfortable.
Next Steps
If you want to make sure your file can stand up to a second look, Book a consultation with my team today. We help everyday Canadians navigate the confusing world of taxes so you can keep more of what you earn.
Until next time, happy Canadian Real Estate Investing.
Cherry Chan, CPA, CA
Your Real Estate Accountant
