Many Canadians have seen investment properties lose value and carrying costs rise out of control, one advisor outlines her approach
The promise of near-constant appreciation, steady cashflow, and net-positive carrying costs brought thousands of Canadian investors into the condo market. According to reporting by Maclean’s, in 2019 38 per cent of Toronto condos and 46 per cent of Vancouver condos were owned by investors. A Toronto condo in Q1 of 2019 sold at an average price of $560,000. That average rose to $808,000 by Q1 of 2022. In the years since, that market has cratered, falling roughly 15 per cent to $685,961 in Q2 of 2025 according to the Toronto Regional Real Estate Board (TRREB). It’s a trend that has been largely reflected across most of Canada’s major metro areas. Now, whether due to interest rate increases, curbs to immigration, or the unappealing small average size of these units, many of those Canadian condo investors are now left with investments that are losing value, cashflow negative, and hard to sell.
Tina Tehranchian lived through the last major Canadian real estate downturn, a seven year period between 1989 and 1996. The senior wealth advisor with Assante Capital Management Ltd. knows firsthand that real estate cycles are long. She explained how she’s working with clients who own condo investments now, managing both the practical and emotional implications of their investment properties taking a hit.
“I have clients who own multiple rental units that they run as businesses, and they’ve been suffering because market values and rents have gone down. It’s been toughest for people who invested as a short-term proposition because they were thinking the bull run would continue as it had in the last ten years or so. Now they’re stuck with higher mortgage rates, lower rents, and a real cashflow crunch,” Tehranchian says. “The main thing, though, is acknowledging the emotional toll that this is taking on clients. For many people real estate is not just an investment, it’s tied to their sense of security and success. I think advisors need to validate the anxiety and frustration that clients are feeling in this environment.”
As they help handle emotional turmoil for clients, Tehranchian also stresses that advisors need to add context for clients. In her interactions, she emphasizes the cyclical nature of real estate and the long-term trends that can happen. She also makes sure that the conversation is about the client’s particular reality, not the overall market headlines. If the real estate investment was meant as a diversifier or an income generator, those purposes could still be intact depending on the nature of the exact property, local market, or tenancy arrangement. Even for those investments aimed at appreciation, depending on the time the property was bought there might even be a little bit of gain still left for a client to realize.
Tehranchian also works to stress test her clients’ financial plans against any downturns in their investment properties. She accounts for environments of higher carrying costs or declining values before they even invest in real estate properties. She outlines a worst-case scenario of six months without a tenant while interest rates rise three per cent. If their cashflow remains resilient in that environment, those clients will feel more comfortable. For those who are possibly out over their skis but who see long-term potential in a property, Tehranchian cautions against a panic sale and instead recommends finding ways to their refinance, restructure debt, or generate short-term cashflow that can help cover carrying costs in the short-term.
Even those clients who invested in a small condo that’s now losing value might not be in as bad of a situation as it might appear. Tehranchian sees value in shifting perspectives and reminding clients that a paper loss is only one portion of their wealth. Other factors like liquidity, diversification, and future earning potential could matter just as much. A disciplined and patient investor can often recover from these cycles, provided they aren’t overconcentrated in that losing asset class.
Even taking a loss, if forced to, can have some silver linings. A capital loss can be counted against future or even past capital gains to offset tax burdens. The additional tax space made by that loss could help investors who might want to take on some more momentum in their portfolio and help them get out of the wider damage these retail losses did to their net worth. On the whole, Tehranchian believes that advisors can provide the context and guidance to help clients through the difficult situation a condo loss might present them with.
“Our job is to help our clients manage their cash flow, diversify their portfolio, focus on their long-term strategy, and make them feel both financially and emotionally supported in volatile times. Advisors do this all the time during stock market pullbacks to help clients refocus on the long-term, but we should do that with our other types of assets too,” Tehranchian says. “We need to help clients see beyond today's turbulence, and we need to help them stay anchored to the long-term plan which will help them achieve their goals.”
