Sky-high mortgage rates and slipping condo prices in Toronto have turned what seemed like surefire investments into money pits, evidenced in a recent listing for a condo in one of the city's most luxurious buildings.

A condo purchased in 2021 for north of $2 million is now up for sale at less than two-thirds of that price.

Located in the St. Regis Residences (formerly the Trump International Hotel and Tower) at Bay and Adelaide, this 47th-floor, two-bedroom, two-bathroom unit is currently listed for just over $1.5 million under Power of Sale, suggesting the owner may have bit off more than they could chew for an investment property.

🚨 POWER OF SALE ON BAY STREET

📍Toronto, ON 🇨🇦

After buying this massive Bay St condo 🌇 for $2.1M in 2021, the owner fails to attract either a sale or tenant. Now it's under 'Power of Sale' with a list price of $1.5M.#ToRE 👇🏽 pic.twitter.com/A6CMiuayay

— Shazi (@ShaziGoalie) July 5, 2023

According to the Mortgages Act of Ontario, Power of Sale Ontario allows a lender to reserve the right to list a home if the mortgage has been defaulted on for three months. Once a unit is sold under Power of Sale, the lender takes what is owed out of the property sale, leaving what remains for the owner.

The owner appeared to try and make a few bucks off the listing, attempting to sell for $2,588,000 in March 2023, but failing to attract a buyer. On July 4, unit 4704 at 311 Bay Street was re-listed for $1.58 million, over one million dollars cheaper than the listing four months earlier.

One of the more shocking ones.

— PJ (@PearlJamPat) July 5, 2023

Many luxury condo owners in Toronto have started to feel their investment potential slip away since a series of successive lending rate hikes in 2022, topped off in June when the Bank of Canada raised its benchmark interest rate to 4.75 per cent.

Units like 4704 at the St. Regis can be difficult to rent out, owing to exorbitant condo maintenance fees and property taxes.

LMFAO, 3.2k monthly maintenance + Annual Property Taxes $11.8k... we r so deserved what's about to happen!

— Meow (@crypto_mma) July 5, 2023

In this case, the owner was being asked to fork over $3,200 per month on fees, driving up potential rental rates well beyond the average two-bedroom condo price in the downtown core. Add in the almost $12k annual property tax rate, and the unit runs up an annual bill of over $38k.

It's a testament to how far the Toronto luxury condo market has fallen since the peak boom days in the 2010s.