The Ford government's plan to spend $300 million buying 2,200 vacant Toronto condos may actually reward poor-performing developers and keep condo prices high, according to a commentary published by the Fraser Institute on June 15, 2026. The policy analysis argues that while the province frames the purchase as an "investment" to increase affordable housing, it risks undermining market competition that would otherwise drive prices down for would-be buyers.
Toronto's condo market is experiencing unprecedented oversupply. There are currently 4,295 newly built condos on the market, a record high, with an additional 8,629 unsold units still under construction and expected to hit the market in coming years. Condo prices were already down five per cent year-over-year in the first quarter of 2026 on a per-square-foot basis. Of the 2,200 condos the government plans to purchase, only 550 will be rent controlled.
According to author Austin Thompson, the government's intervention threatens to shield developers from the consequences of their poor decisions. "A developer that builds the wrong homes, for the wrong price, should bear the financial consequences of those decisions," the report states. The analysis notes that some developers are already converting condos intended for ownership into rental apartments without any government handouts. Thompson argues that when poorly performing developers lose money on bad projects, "it frees up more land, construction labour and financing for other developers with a better track record of delivering homes that Ontarians want at prices they can afford."
The report explains that market competition is exactly what should be driving affordability right now. The flood of unsold condos forces developers to compete with each other to attract buyers and renters, pushing prices down naturally. But by purchasing vacant condos that weren't selling at their current price, the government risks overpaying for units and weakening the competitive pressure that would otherwise benefit consumers. The analysis characterizes the move as "a taxpayer-funded subsidy for poor-performing developers" that helps sustain housing prices for their benefit. While 550 rent-controlled units will directly help those families, the report questions whether that benefit justifies the cost, especially since Queen's Park hasn't released key details like the expected return on the $300 million investment.
The commentary recommends that instead of pouring taxpayer dollars into the condo market, the Ford government should let developers compete and reduce prices until vacant units attract buyers or renters naturally. Thompson also notes the government has yet to fully implement recommendations from its own Housing Affordability Task Force, reforms that could improve affordability at little or no cost to taxpayers. At a time when housing costs remain top of mind for millions of Ontarians, the last thing the province should do is help prop up prices for developers' benefit.