Rising borrowing costs, excess supply, and stalled development have brought echoes of the early-1990s recession to Toronto’s housing market. Canadian Mortgage Capital Corporation (CMCC) and Atrium Mortgage Investment Corporation (Atrium) founder and CEO Rob Goodall, and president and COO Richard Munroe share lessons from that downturn, financing today's housing needs, and what could set the stage for recovery. 

“This is the second worst downturn I've seen in my 40-year career, but it's not as severe as the early ‘90s, and it's very much oriented to residential this time,” said Goodall. “Whereas in the early ‘90s, every sector of real estate was impacted. Having said that, the high-rise residential downturn this go-round is every bit as bad as the early '90s, and maybe slightly worse.” Goodall sees familiar pressures from higher interest rates, economic weakness, and new supply arriving as demand retreats, but points to stronger financial foundations today: pension funds hold roughly 15–20% of their assets in real estate, REIT leverage is typically at or below 50%, and leading developers have stronger balance sheets. 

The early-1990s downturn set Goodall on an unexpected entrepreneurial path. After leaving Royal Trust as consolidation thinned Canada’s lending market, he helped developers negotiate debt workouts with banks, seeking terms that preserved borrowers’ businesses and maximized lenders’ recoveries. Founded in 1994, CMCC moved into mortgage brokerage as the market stabilized, building on relationships Goodall had developed on both sides of the negotiating table. 

As a mortgage broker, Goodall found that private lenders with limited funds often prioritized higher-interest loans, making financing harder to arrange for lower-risk borrowers. “I started Atrium in 2001, believe it or not, out of a frustration of dealing with the existing private lenders,” Goodall recalls. Initially established to complement CMCC’s brokerage business, Atrium marks its 25th anniversary in 2026. 

During the 2008–2009 financial crisis, Atrium met redemptions equal to 25% of its capital, even as its loans performed well, Goodall recalls. That experience helped motivate Atrium’s September 2012 listing on the Toronto Stock Exchange under the ticker symbol “AI,” giving the company permanent capital without investor redemption demands. “We are actively lending across CMCC's various funds. As at the end of Q3, we had a pipeline of over $100 million in approved or accepted loans scheduled to fund over the next three months. And, as a public company, it's a competitive advantage that Atrium can focus on lending without worrying about potential redemptions." 

Today, Goodall draws on four decades of lending experience, including lessons from aggressive portfolio growth at Royal Trust, to guide Atrium’s measured approach: favouring properties in primary locations with greater resale liquidity and borrowers who have weathered difficult markets. “A seasoned developer, a seasoned real estate investor, is very good at getting themselves out of a difficult situation,” said Goodall. That experience and discipline, he says, helps Atrium protect capital while maintaining its capacity to support established clients through a downturn. 

Munroe points to the loss of condominium pre-sales as a major financing hurdle. Pre sales and purchaser deposits once allowed many projects to proceed with just 10–15% equity; landowners now face continued carrying costs or a shift to rental development, which requires more equity. “Both the amount of equity required and the returns achievable on those projects are pretty significant constraints today on new housing supply,” said Munroe. 

CMCC is seeing more requests from well-funded borrowers for mezzanine loans, secondary financing behind a conventional construction loan. This has allowed CMCC to provide financing solutions alongside senior bank debt. “Developers are looking for us to help effectively reduce the amount of equity required for them to build those projects, with the aim to get closer to what they've historically been used to on condo projects,” shared Munroe. “But even reduced equity requirements on some of these projects can approach 50 or 100 million dollars.” 

Munroe cites a recent $15 million mezzanine loan supporting construction of a 50-storey rental apartment building in midtown Toronto, behind $195 million in first-mortgage financing from a Schedule A bank. The loan reduced the equity contribution required from the project’s institutionally backed owner. Repayment is planned at completion through a term loan insured by Canada Mortgage and Housing Corporation (CMHC), which CMCC could provide through its insured lending platform. For CMCC, the institutional backing offered reassurance that further equity would be available to cover any shortfall if refinancing proceeds proved insufficient to repay the mezzanine loan. 

For completed projects, failed purchaser closings can leave developers with more construction debt than anticipated. Inventory financing helps address that gap. “An inventory loan would typically be a single loan secured by all of the unsold units in a residential project, whether the project's a condo title or freehold, and units are released as they're sold, with proceeds from the sale used to pay down the loan balance,” Munroe explains. 

Agreeing on unit values and loan amounts can be difficult in today’s market, Munroe notes, and available financing may fall short of the remaining construction debt. Vacant inventory generates no income, so borrowers typically need their own resources to cover interest payments or funds set aside in an interest reserve. 

CMCC manages more than $2 billion across institutional mortgage funds, Atrium, a high yield mortgage fund, and CMHC financing. With this structure, CMCC can draw on multiple lending platforms to respond to different borrower needs and market opportunities. With residential development subdued, Munroe describes increased bridge lending for industrial, retail, and rental apartment properties. “That's what you have to do in a downturn,” Goodall says. “You have to evolve and get into the sectors where you can be successful.” 

An approved CMHC lender for more than 20 years, CMCC has renewed its activity under Jordan Forfar, CEO of Insured Mortgages Inc. Goodall says insured financing can offer rates 75 to 100 basis points lower, potentially determining whether a rental project is viable. “We've been able to refer business back and forth quite a bit to assist our borrowers, depending on whether a property might be fit for CMHC at that particular time or not,” Munroe says.

Goodall sees recovery depending on stable or lower bond yields, renewed consumer confidence and resale activity, manageable construction costs, and continued government support. Toronto’s condominium construction pipeline is anticipated to be at roughly 20,868 projected completions in 2026; the condominium count could fall to 15,825 by 2027, and 12,065 in 2028, with fewer starts eventually creating shortages as existing supply is absorbed. 

Munroe says the HST rebate has helped sales of standing inventory, but renewed construction requires a stronger financial case: “No developer is going to build these projects at a loss. So prices have to move to a point to make these projects economically viable.” Until then, CMCC and Atrium are applying lessons from earlier downturns through disciplined lending, established borrower relationships, and a flexible approach to financing that responds to changing market needs.