Inside Canada’s Latest Real Estate Scandal

🫣Ontario’s $100M Mortgage Scandal

• Over $100 million in investor funds are missing after the collapse of Sussman Mortgage Funding Inc.

• The receiver found that much of the money was never lent out, and payments were made by new investors instead.

• The receiver estimates 60% of investors’ funds are gone, with the rest tied up in unfinished developments.

• The firm targeted investors in Barrie and Muskoka, promising high returns on private mortgages during the real estate boom.

• Sussman allegedly used community trust to attract investors, many from Toronto’s Jewish community, without proper documentation.

• The downturn and rising interest rates exposed the scheme as repayments were missed and mortgages went unregistered. _(source)

Why This Matters: It highlights the regulatory blind spots in syndicated lending and the risks associated with trust-based investing without proper verification. For investors and policymakers, it serves as a warning that Canada’s housing correction is revealing more profound systemic weaknesses beneath the surface.

📈Toronto Office Market Rebounds Strong

• Toronto’s downtown office market posted one of its strongest quarters in years, driven by 1.5 million sq. ft. of net absorption.

• Citywide vacancy dropped 90 bps to 18.9%, signaling Toronto is leading Canada’s office recovery.

• The improvement was fueled by no new office deliveries this quarter and strong demand for premium Class-A space, resulting in a 250-basis-point tightening of vacancy.

• CIBC Square Phase II (1.4 million sq. ft.) is scheduled to deliver in Q4 and is almost entirely pre-leased, reflecting ongoing demand for high-quality assets. _(source)

Why This Matters: Toronto is re-emerging as Canada’s most resilient office market, supported by a return-to-office push and limited new supply. But the broader recovery is uneven, relying heavily on trophy assets and conversions, with weaker cities still struggling to backfill aging space.

❌ Mattamy Cancels The Clove Tower

• The Clove, a planned 33-storey and 9-storey condo project in Etobicoke, has been cancelled.

• Developed by Mattamy Homes and QuadReal Property Group, totaling over 600 units.

• Fewer than 10% of pre-construction units were sold before cancellation.

• Mattamy cited “significant headwinds” and said proceeding wasn’t in the buyers’ or the community’s best interest.

• Buyers will receive full deposit refunds, and the project could relaunch if conditions improve. _(source)

Why This Matters: Highlights the widening gap between what builders must charge and what buyers can afford. Indicates the GTA housing correction is deepening, affecting even major developers. Stalled projects risk worsening the region’s long-term housing shortage despite short-term price drops.

🧊 Calgary Homes Face Market Cooldown