A recent report on the B.C. housing market revealed that more than 2,000 new condos in Metro Vancouver are sitting empty, waiting to be sold. This is predicted to rise to 3,500 by the end of the year. A separate report for the Greater Toronto-Hamilton area revealed a record 24,396 unsold condos at the end of 2024. Similar stories of empty, unsold condos ring out across the country.
But how is this possible amidst a housing crisis? After all, aren’t we constantly told that the reason there is a housing crisis is that there is not enough supply? These same cities where there are thousands of empty condos are also the same cities where less than one per cent of rentals are available and affordable.
This is what is known as a market failure. Demand for houses and apartments exists. The problem is that nobody wants these condos at these prices.
A majority of the empty condos are what Toronto realtor Ron Butler called “dog crate condos”. Most are less than 600 square feet. Their quality is also often poor. This means couples and especially families—the majority of home buyers—have no desire to live in them.
So why were they built? Well, in Toronto and Vancouver, two-thirds of these micro-condos are owned by real estate speculators. They buy “presale” before construction is even started in the hopes of flipping the unit at a profit. This is known as “assignment sales”, which are not tracked, but it is believed that up to 40–50 per cent of new units change hands prior to completion. Alternatively, the speculators wait for the unit to be complete, then rent it out while waiting for the price to rise.
This type of speculation drives up prices. And as long as prices keep going up, the speculators make fabulous profits. Butler described the fervour behind this investing: “people were stupid not to get involved… It’s just like magic money.”
This is the insanity of the capitalist housing market. Instead of building what people need, the market builds what makes the quickest buck. Until recently, that was selling to investors—parasites who fuelled the explosion in prices and actually profited from it.
Now investors are fleeing the market. The developers built too many of these condos for even the voracious appetites of the speculators, and the supply of tenants has dried up. Now, tens of thousands of condos sit empty—in cities where thousands of people are homeless, and hundreds of thousands are crushed by rent and mortgage payments. No one could ask for better proof that the market has utterly failed to provide the housing people need.
