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“You can get these loans from all types of lenders, forget tier one banks,” said Zayadi, adding rates are maybe eight per cent to 12 per cent depending on the loan quality. What happens in 12 months? A bulk sale might happen, or some stock might become rental if that market improves, he said.

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Across the country in Toronto, Urbanation Inc. said last month there were just over 3,900 units unsold in the market, but that total doesn’t include defaults, which probably adds 3,000 units to the numbers, according to the research company.

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“The private equity is real, just smaller groups,” said Shaun Hildebrand, the president of Urbanation, adding they are trying to grind out a low enough price to cover their costs of carrying the condo. “The thesis is hold it for three or five years, wait for it appreciate as the market sees a reversal in supply.”

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By 2028, the theory goes, supply will again become constrained, and prices will start rising due to shortages. But condos will still never be an effective product based on yield, and mostly speculative again.

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“We talk to groups who say they will buy units today and sell in peak values in a few years,” said Hildebrand, who doesn’t think that scenario will play out. “We see small batches of maybe 20 units changing hands. Nothing huge.”

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In the interim, it is a waiting game for something that will trigger further price declines and prompt developers to sell unsold units at deeper discounts.

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Anthony Scilipoti, president and chief executive of Veritas Investment Research, said the only way the condo market will resolve itself is with “pain” because there just isn’t demand for unsold units.

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“I’ve always found it comical that there is talk of a lack of supply. There is lots of supply, it is just at what price,” said Scilipoti. “It’s also the size. Everybody wants a larger or extra large suite, and they are all made small.”

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The Bay Street veteran, who had worked in the garment trade, said it is like a clothing store with a bunch of sizes people don’t want.

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“Those get sold at 50 per cent off during regular time periods and then on Boxing Day they get sold for 50 per cent off the 50 per cent,” he said. “People who say it can’t go below a certain price because it is below the cost of replacement, but nobody is replacing it. It is like those end-of-line clothes.”

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Continuing with the garment trade metaphor, the CEO remembers having stocked up on T-shirts he imported from China in the early 1990s. They were popular. He bought 2,500. The market turned, and he had 500 left.

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“We couldn’t even give them away,” he said.

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He recalled taking all his tees down to the legendary Ed Mirvish, whose Honest Ed’s in downtown Toronto was famous for discounted goods. “They had cost me $3 (each). He said, ‘I will give you $1.’ I told him he was killing me, and he told me: ‘You came here trying to sell this. I don’t want these.’”

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Call them “vultures,” but that is who is left to buy at the bottom of the market, when few people want your product, and Honest Ed stepped in at the only price Scilipoti could get.

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Is that the next step for the unsold condo market?

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“It’s the lenders,” he said. Once they stop loaning money out, Scilipoti said, more speculative condo owners and developers will go into bankruptcy, but as long as there is money to finance it, the holding pattern continues.

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Betting on the demand returning feels more and more like a long shot, especially given declining immigration.

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Until then, the waiting game continues, but today’s Honest Ed is out there. It’s just called private equity.

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