Maggie Hildebrand's first apartment in Toronto had a kitchen, a dining table, a workspace and a bed – all in the same 300-sq-ft room.
It was a decent home at first, close enough to her job downtown and with all the bare necessities for daily living.
But it didn't take long for the 28-year-old to feel boxed-in. "It was so isolating in that tiny space," she told the BBC. "It definitely feels like it's just somewhere to put worker bees during the night."
Ms Hildebrand lived in one of the city's micro-condos, a once rare sight in Canadian real estate that has become ubiquitous in the last decade thanks to fast-growing, high-rise developments in major cities like Toronto and Vancouver.
But - as Canada's condominium market sinks to lows not seen in decades due to a series of market pressures - the value of these micro units is cratering faster than any others.
The condo market is experiencing a downturn not seen since the 1980s, with thousands of move-in-ready units sitting empty and unsold across Toronto and its surrounding regions. Over the last year, an unprecedented 18 condo projects were cancelled in the city, with experts expecting that number will grow as demand continues to plummet.
The downturn has reignited debate over whether developers catered too much to real estate investors by building smaller, more affordable units that minimised square footage to keep prices low in areas where land values are high, and which were often designed to be rented out or flipped for profit.
Investors own the majority of condos under 600 sq ft in Toronto, according to national database Statistics Canada. Construction of these small units skyrocketed in 2016, and they now make up 38% of condos built in the city, compared with only 7.7% before.
These units have not exploded in the same way in the US, where they represent a very small share of the market, though Nadia Evangelou, a senior economist at the National Association of Realtors, said "their prevalence has roughly doubled over the past decade".
With so much inventory on the market in Canada, some micro-condos that had sold for half a million dollars a few years ago are now reselling for C$300,000 ($217,000; £163,000) or less – a price recently unthinkable in downtown Toronto, which is often cited as one of the most unaffordable cities in the world.
"It's a race to the bottom getting these things sold," said Shaun Hildebrand, president of Urbanation, an organisation that has been tracking the high-rise market in Toronto for decades. (Shaun Hildebrand is not related to Ms Hildebrand.)
Why are so many condos sitting empty?
The condo slump is not unique to Toronto, with Vancouver experiencing a similar –albeit smaller – downturn since 2024.
There are a few reasons for this, experts tell the BBC.
First is an overabundant supply. Thousands of units were built over the last two years, in part to meet an unprecedented surge in Canada's population driven largely by immigration, Mr Hildebrand said.
But the number of newcomers dropped sharply following a shift in Canada's immigration policies, made partly to address the housing crunch. Areport released in December by the Bank of Montrealshows that Canada's population saw its largest decline in 2025 on record since the 1940s, barring the 2020 Covid pandemic, driven mainly by new immigration caps.
It is a turn-around that developers could not have predicted, and resulted in more than 60,000 new units completed in recent years to meet a demand that no longer exists.
Simply put, "the market just got way too ahead of itself", Mr Hildebrand said.
The second reason is pricing.
Canada's central bank lowered interest rates during the pandemic to stimulate the economy, and investors, looking to buy in a real estate market that had seemed like a sure bet for decades, assumed prices could only continue to rise.
For a while they did, spiking "to a level that really made no sense", Mr Hildebrand said.
Then, the Bank of Canada began to increase rates to battle post-pandemic inflation. Combined with oversupply, that sure bet became less certain.
Now, some investors are having trouble closing on units they bought pre-construction at those inflated prices. Many have been forced to try and sell them at a significant loss. Others are too spooked to enter the market or are waiting for prices to drop even further, Mr Hildebrand said.
There is some speculation thatCanada's 2022 freeze on foreign home buyers, brought in to help tackle the housing affordability crisis, also played a role. Numbers show that they represent a small fraction of owners – around 2% to 6% – but Mr Hildebrand said it is possible it has sent a signal that Canada is closed for business.
The condo crash and the housing market
One clear winner from the downturn of the condo market is renters like Ms Hildebrand, who now have more options due to greater supply and slightly better deals on rent.
Ms Hildebrand paid C$2,200 a month for her micro-condo. She has since moved to a larger, 700 square-foot, one-bedroom apartment in an older building with a leafy backyard for only C$200 more. She credits the move to a big improvement in her quality of life.
"My birthday is tomorrow, and I'm having a party and hosting 25 people," she told the BBC in December. "A year ago, that was not possible."
Mr Hildebrand said the slump will likely change who developers see as their main customer, shifting from short-term investors seeking quick profits towards longer-term investors and people who plan to settle in the condo they're buying,
"We've learned our lesson here," he said. The units won't be phased out altogether, he noted, because there is still demand for affordability, "but we went way too far".
Some buyers are benefiting, too. Alex Cruz, a Toronto-based estate agent at Ari Zadegan Group Realty, told the BBC that smaller units were being purchased by those looking for a bargain.
"If there is a good deal per square foot, people will buy it," Mr Cruz said, adding it had given some "an opportunity to get into the market".
The slump comes as Canada grapples with a housing crisis that has become a central political issue for all levels of government. Prime Minister Mark Carney has promised to double the rate of new homes built in the next decade.
With the construction of thousands of units now put on hold or cancelled, there will be fewer units entering the market by the end of the decade. This could exacerbate Canada's housing crunch, Mr Hildebrand said, as condos are heavily relied on to boost supply in big cities.
And Mr Hildebrand and others warn that the low prices will be short-lived.
"The question now is how long do we stay here, and what are the implications going to be for the housing supply in the next decade?" Mr Hildebrand said.
Maggie Hildebrand's first apartment in Toronto had a kitchen, a dining table, a workspace and a bed – all in the same...
