What did OSFI say about condo appraisals?

OSFI cautioned banks that blanket appraisals on pre-construction condos can breach the 80% loan-to-value guide when prices fall. It wants unit-specific valuations that reflect current comparables. The goal is to keep uninsured mortgages within prudent limits and reduce losses if buyers cannot complete at closing.

How could this affect my pre-construction mortgage?

If your final appraisal is lower than the purchase price, your loan amount may shrink to keep the LTV within 80%. You might need to add cash, find a co-borrower, or switch lenders. Start a funding review 90 to 120 days before completion to avoid last-minute surprises.

What is a blanket appraisal and why is it risky?

A blanket appraisal applies a broad value across many units in a project. It ignores floor, view, size, and fast-changing resale prices. In a falling market, it can overstate value. That pushes LTV ratios higher, raising default and loss risk if borrowers cannot top up at closing.

What should developers and investors watch next?

Watch resale price trends, assignment discounts, and lender guidance on condo appraisal rules. Monitor cancellation rates and construction draw conditions. Also track how banks adjust credit limits by project and whether they widen pricing for condos. Clear signals here show how seriously lenders are managing concentration risk.

Global Market Insights

OSFI Warns Banks on Condo Appraisals as Prices Slide — March 10

ByDanny Kontos March 10, 2026March 10, 2026

On March 10, osfi warns major canadianbanks that blanket condo appraisals can break condo appraisal rules. OSFI says pre-construction prices are down 10–30% from 2022 peaks, so using broad valuations may exceed the 80% loan-to-value limit. That raises loan to value risk at closing if buyers cannot cover gaps. We explain what this means for pre-construction mortgages, lenders, and developers, and how investors in Canada should read the next steps.