Finances

June 22, 2026 Published by Toronto and Area Chapter - By Anthony Ing

Why Condo Fees Are Still Rising — Even as Inflation Cools

From the Spring 2026 issue of CCI Toronto Condovoice Magazine.

Condo fees are one of the most talked-about — and least understood — costs of condo living. Owners see the final number on their monthly statement, but what actually drives condo fees often feels like a black box. When fees go up, frustration follows. When some costs come down and fees still rise, confusion sets in.

That gap between perception and reality is what prompted us to publish our annual Condonexus Condo Fee Trends Report. Now in its fourth year, the report looks inside condominium budgets to understand where the pressure is really coming from. This year’s analysis reviewed 159 condominium budgets across Ontario, representing more than $340 million in operating budgets.

What follows are some of the key findings from that analysis — not to defend condo fee increases, but to explain them — along with insights shared during our recent webinar launch of the report. When the numbers are broken down line by line, the story becomes far clearer, and far less mysterious.

A Moderate Overall Increase, With Mixed Drivers

Across the condos analyzed, condo fees increased by an average of 4.2% in 2025. While this represents a slight uptick from the previous year, it remains well below the increases seen during the height of the pandemic.

More importantly, the increase was not driven by all costs rising at once. Some expense categories declined, while others continued to increase. The overall fee change reflects the push and pull of different pressures within condominium budgets.

Reserve Funds Contribution Increases Remain High

The most significant driver of condo fee growth in 2025 was reserve fund funding.

Reserve fund contributions increased by an average of 11.5%, marking the third consecutive year of double-digit increases. This trend persists despite the fact that short-term construction inflation has cooled. Ontario’s residential construction price index rose by just 1.8% as of Q2 2025.

However, the easing of current inflation does not negate the lasting impact of prior cost increases. Over the past five years, residential construction costs have increased by approximately 75%, and reserve fund studies are still adjusting to that reality.

Jan Kundakci, an auditor with Adams + Miles, a firm that works extensively with condominiums, made the point during the webinar: “Current inflation may be low, but those jobs still have to happen, and they’re still going to cost more than they did a few years ago.”

Lower Insurance Premiums Return

Insurance was one of the few categories to provide meaningful relief. Insurance premiums declined by 11.7% in 2025, continuing the easing that began in 2024.

After several years of sharp increases, the insurance market has softened. However, this should be viewed as a normalization rather than a permanent shift. “Insurance is cyclical,” Kundakci cautioned. “It’s gone down now, it’s going to go back up.”

Another important development is how risk is being allocated. As Kundakci observed, “A lot more corporations are self-insuring now. Deductibles are really high.” Lower premiums are often accompanied by higher deductibles, leaving corporations with greater exposure when claims arise.

Utilities Show Some Relief and Some Volatility

Utilities presented mixed signals in 2025. Gas costs declined by approximately 8.4%, driven by lower commodity prices and the removal of the carbon tax component. This provided some short-term relief within operating budgets.

Electricity costs, however, moved in the opposite direction. Electricity increased by 3.7%, following a 5.7% increase in 2024. Increased demand, electric vehicle charging, data centres, and weather-related usage are contributing to growing volatility, making long-term forecasting more difficult.

Looking Beyond the Headline Increase

Condo fees are often discussed by owners as if they rise without reason. In reality, they are shaped by legal obligations, long-term planning, and costs that cannot be avoided. As Luis Hernandez put it plainly, “Boards don’t have the option to ignore reality.”

The data shows that fee increases are not driven by a single runaway cost, but by several structural pressures moving at the same time. Reserve fund requirements remain elevated, labour-related costs continue to rise, and insurance and utilities move in cycles that do not always match inflation headlines.

When viewed together, these forces make condo fees far less mysterious. The real cost of running a condominium is not found in any one line item, but in how these pressures interact over time — and understanding that is key to more informed conversations about what condo living actually costs.

The full Condonexus 2026 Condo Fee Trends Report is available at condonexus.com/blog.

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Anthony Ing
Co-Founder Condonexus