Canada has a housing shortage. But at the same time, parts of the country have too many condominiums for sale.

Those two statements sound contradictory. They’re not.

Toronto has experienced a historic collapse in new condominium sales. In 2025, only about 1,600 new condos were sold across the Greater Toronto and Hamilton Area. That was down roughly 60 percent from the previous year and approximately 95 percent from the peak recorded in 2021.

This is more than a slow market. It represents the failure of the financial machinery that produced much of Canada’s new urban housing.

A condominium project is usually financed in stages. Before a lender advances construction financing, the developer must demonstrate that a significant percentage of the building has been sold. Purchasers sign agreements and provide deposits. Those presales give the lender confidence that the completed units will generate enough revenue to repay the construction loan.

The foreign-buyer ban was politically simple. Foreign buyers were portrayed as part of the affordability problem, so excluding them appeared to protect Canadians.

The emerging condominium crisis reveals that capital performs more than one role. It can inflate the price of existing assets, but it can also finance the production of new ones.

Canada may now be forced to decide whether it wants less foreign ownership or more housing badly enough to accept the capital required to build it.

That is the tension.

The country did not eliminate the need for investor capital. It merely reduced the number of investors allowed to provide it.

------------

**Real Estate Espresso Podcast:**
Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)
iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)
Website: [www.victorjm.com](http://www.victorjm.com)
LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)
YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)
Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)
Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)
**Y Street Capital:**
Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)
Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)
Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

On today's show we're talking about a construction risk that may not be in your pro forma.

You might say, "Victor, I only hire legally authorized workers. Why should immigration enforcement affect my project?"

That's a perfectly reasonable question.

But it misunderstands how a construction labor market works.

Construction pricing is not determined solely by who works on your job site. It's determined by the depth of the entire labor pool competing for the same work.

Over the past several months, immigration enforcement in the United States has accelerated considerably.

ICE arrests increased from 32,545 in May to 43,021 in June, and then to 49,571 in July.

Nearly 40 percent of the July arrests occurred in Texas and Florida.

Now, those numbers by themselves don't tell us much about construction. But when you look at what is happening in individual markets, the picture becomes more interesting.

In Austin, Texas, one large homebuilder reported that framing labor costs increased between 25 and 50 percent in a matter of weeks.

-----------

**Real Estate Espresso Podcast:**
Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)
iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)
Website: [www.victorjm.com](http://www.victorjm.com)
LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)
YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)
Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)
Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)
**Y Street Capital:**
Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)
Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)
Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

On Sept 10 at 8PM EDT, 5PM PDT, I'm hosting a live conversation with Jacob Blackett, CEO of Sponsorcloud. We are going to be talking about how software can improve the investor relationship for private investments. If you can't attend, register anyway and we will send you the recording. CLICK HERE to register.

-------------

For generations, automobile manufacturing has been one of the great economic anchors of North American cities.

Think about Detroit, Windsor, Oshawa, Toledo, Louisville, Georgetown, Kentucky, or countless smaller communities throughout Ontario, Michigan, Ohio, Indiana and Tennessee.

The automobile plant was never just a factory.

Thousands of people worked inside the plant. Thousands more worked for suppliers making seats, dashboards, transmissions, brakes, electronics and stamped metal components.

Then there were trucking companies, warehouses, restaurants, hotels and service businesses.

Those paychecks eventually found their way into houses, apartments and shopping centers.

But something fundamental is changing.

China has become the world's dominant electric-vehicle manufacturing center. In 2025, nearly 22 million electric cars were produced globally. China manufactured about 16 million of them.

That's nearly three quarters of global EV production.

More importantly, China produced about 20 percent more electric vehicles than its domestic market consumed.

VW just laid of 50,000 people and announced another 50,000 workforce reductions. Nissan is in trouble. Honda is in trouble. Stellantis has excess capacity. We will see major changes in the auto industry globally. Are your real estate investments reliant on auto manufacturing or some portion of the supply chain as the employment base?

-------------

**Real Estate Espresso Podcast:**
Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)
iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)
Website: [www.victorjm.com](http://www.victorjm.com)
LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)
YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)
Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)
Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)
**Y Street Capital:**
Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)
Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)
Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)