Toronto Condos Under $400K in 2026: What’s the Catch in Today’s GTA Real Estate Market?

Toronto Condos Under $400K in 2026: What’s the Catch in Today’s GTA Real Estate Market?

For the first time in years, you can find condos in Toronto listed for under $400,000.

If you’ve been watching the Toronto real estate market, that number probably stops you in your tracks. Just a few years ago, entry-level condos were selling well above that mark, often with multiple offers.

So what changed?

And more importantly — is this an opportunity… or a red flag?

Let’s break it down.

Why Are Toronto Condo Prices Dropping?

The Toronto condo market has gone through a major correction.

After the post-pandemic surge in 2021 and 2022, rising interest rates significantly impacted affordability across the GTA real estate market. Monthly payments increased, investors pulled back, and first-time buyers became more cautious.

At the same time, condo inventory increased.

Many investors who purchased pre-construction units during the boom are now facing higher mortgage rates at closing. Some are choosing to sell instead of holding, adding more supply to the resale market.

The result?

More condos available.
Longer days on market.
And in some cases, prices under $400K — especially for smaller units or buildings outside the downtown core.

Where Are These Sub-$400K Condos Located?

It’s important to understand that not every Toronto condo is suddenly affordable.

Most properties under $400K tend to fall into a few categories:

• Studio or micro-units
• Older buildings with higher maintenance fees
• Units farther from major transit lines
• Buildings with limited amenities
• Areas undergoing transition or revitalization

Some opportunities exist in parts of Scarborough, North York, and certain east-end pockets. Buyers looking strictly downtown will find fewer options at that price point.

For comparison, when we look at Mississauga real estate, entry-level condos are also adjusting, but pricing varies significantly by location, building age, and proximity to transit like the Hurontario LRT.

So What’s the Downside?

Here’s where strategy matters.

1. Higher Carrying Costs

Even if the purchase price is under $400K, buyers need to factor in:

• Mortgage rates
• Condo maintenance fees
• Property taxes
• Special assessments (if applicable)

In older buildings, maintenance fees can be significantly higher, which affects monthly affordability and long-term return on investment.

2. Investor Risk in the Current Market

The GTA condo market was heavily investor-driven for nearly two decades. Today, rental rates remain strong, but cash flow can be tight with higher borrowing costs.

Not every under-$400K condo will generate positive cash flow immediately. Investors need to run numbers carefully.

3. Slower Appreciation (Short Term)

Unlike the rapid price growth seen during peak years, today’s Toronto housing market is more balanced.

Short-term appreciation may be modest.

However, real estate has always been a long-term investment — and Toronto continues to experience strong population growth driven by immigration.

Supply may feel high right now, but condo construction has slowed significantly. That could create tighter supply conditions in the coming years.

Is This Actually an Opportunity?

For certain buyers — yes.

First-time homebuyers who were priced out of the Toronto real estate market now have a new entry point.

Instead of renting indefinitely, some buyers can secure ownership at a price point that hasn’t existed in years.

For long-term investors, this could be a strategic accumulation period. When markets correct, opportunities tend to appear quietly — not during bidding wars.

For downsizers or parents purchasing for children attending university, sub-$400K condos may offer practical solutions in key GTA locations.

How Does This Impact the Mississauga Real Estate Market?

Whenever Toronto condo prices adjust, it creates ripple effects across the GTA.

If buyers can enter Toronto at lower price points, demand pressure on surrounding markets like Mississauga can shift.

At the same time, Mississauga remains attractive for:

• Larger unit sizes
• Newer buildings
• Transit expansion
• Strong rental demand

As the broader GTA real estate market evolves, buyers are becoming more analytical and less emotional.

And that’s healthy.

What Should Buyers Do Right Now?

If you’re considering purchasing a condo under $400K in Toronto, here’s what matters most:

• Review the building’s financial status certificate
• Understand maintenance fee trends
• Analyze comparable sales
• Evaluate long-term rental demand
• Consider future infrastructure plans in the area

Not every “deal” is a good deal.

But not every correction is a crisis either.

Markets move in cycles. The current shift in the Toronto condo market is creating breathing room for buyers who were previously sidelined.

The key is strategy.

Final Thoughts: Opportunity or Warning?

Seeing condos under $400K in Toronto again feels surprising — but it’s not necessarily a bad sign.

It reflects:

• A market correction after rapid growth
• Higher interest rate pressure
• Increased resale inventory
• A pause in aggressive investor activity

Long-term housing demand in the GTA remains strong. Ontario is still building fewer homes than needed to meet future population growth.

Today’s pricing window may not last forever.

If you’re curious whether buying a condo in Toronto — or investing in Mississauga real estate — makes sense for your situation, let’s talk through the numbers.

In a shifting GTA real estate market, strategy matters more than ever.