Home Price Overview

Metro Toronto has a population of roughly 7.1 million and was ranked 23 of the best 100 cities in the world.

Toronto is an attractive city to live in for many reasons, including:

• Cultural diversity: Toronto is one of the most multicultural cities in the world, with people from all over the globe calling it home. This makes for a vibrant and exciting city with a wide variety of cultures, languages, and cuisines to experience.  

• Economic opportunities: Toronto is a major economic hub, with a strong job market in a variety of industries. This makes it an attractive place for people looking to advance their careers.  

• High quality of life: Toronto consistently ranks as one of the most livable cities in the world. It is a safe and clean city with a high standard of living.

• Things to do: Toronto has a lot to offer in terms of entertainment and recreation. There are world-class museums, art galleries, and theaters, as well as a wide variety of restaurants, bars, and nightclubs. There are also many parks and green spaces to enjoy.  

• Education: Toronto is home to several world-renowned universities and colleges, making it a great place to pursue higher education.  

• Transportation: Toronto has a good public transportation system, making it easy to get around the city.  

Overall, Toronto is a great place for people of all ages and backgrounds to live. It offers a high quality of life, a vibrant culture, and a strong economy.

The Toronto real estate market is experiencing a dynamic shift, presenting a nuanced picture for potential buyers and sellers.

While detached homes in Metro Toronto remain a seller's market, granting sellers a degree of negotiating leverage, a substantial influx of inventory is undeniably altering the playing field. Specifically, months of inventory have ballooned from 1.6 to 4.6, a 188% year-over-year jump, signaling a significant increase in buyer options.

The GTA townhouse and condo apartment markets have transitioned to a balanced market, where negotiation power is more evenly distributed.

This equilibrium is primarily driven by a surge in active listings coupled with a collapse in buyer demand. Industry analysts believe the onset of a U.S.-Canada trade war has spooked buyers. While the trade war may have worsened the situation, a flood of supply was coming to market before the trade war, which would have led to a softer spring market in 2025, regardless.

Townhouse inventory, measured in months, has climbed from 2.1 to 5.1, a 143% increase, while condos have seen a rise from 3.3 to 6.2, an 88% uptick. Essentially, the data reveals a consistent trend—a substantial expansion in housing supply, indicating a move toward a more equitable market that is becoming progressively buyer-friendly. For young professionals considering entering the Toronto real estate market, this data indicates increased opportunity and a need to be aware of the changing market dynamics.

GTA Detached House Prices

Since the peak in Spring 2022, detached house prices have dropped significantly and plateaued.

We believe politicians hope to guide the market toward a typical annual real estate cycle with price growth of 1% to 3% annually— in line with income growth.

Demand (purchases) in the GTA is low. Many people want to buy a home, but affordability is so poor that would-be buyers have been sidelined.

New homebuyers can’t afford to get onto the first rung of the homeownership ladder, and high rates prevent existing owners from taking the next step. Fewer households that want to upgrade to a larger home can qualify for a new mortgage at the current rates.

The low supply of active listings mainly fueled price rises, but today, listings are running higher than they have been in the past three years.

Metro Toronto New Construction Home Prices

Prices of new homes have been falling, and some homebuyers who locked in pre-sales contracts after 2021 might find they will have paid much more than the more recent buyers in their development. Based on economic fundamentals, they will likely continue to drop.

Does this concern you? Read the Pros and Cons of Buying Pre-sale Homes

Pre-sales have also softened significantly, and apartment sales have softened the most.

You might think you can negotiate developer price concessions in this type of market, and that is true; however, developers will resist straightforward price reductions.

They will try to refocus buyers on the project's location, smaller deposits, amenities, and quality. If concessions are available, they are likely to first offer extras like an additional parking spot or storage locker or upgrade to premium fixtures before resorting to a lower sale price.

Market Risks

Based on Mortgage Sandbox Analysis, Toronto is at moderate risk of a significant market correction.

Metro Toronto Condo Apartment Prices

After breaking records during the pandemic, Metro Toronto apartment prices are trending downward. The widening gap between the benchmark price and the median indicates that the benchmark has more room to fall.

Purchases have dropped off dramatically this year compared with the previous three years, while there is a record-breaking inventory level. Typically, these conditions lead to price concessions.

A 2023 report by CIBC and Urbanation “found that, on average, condo investors that closed on their newly completed units in 2023 experienced negative cash flow to the tune of $597 per month.”

Buyer activity in the condo apartment market has dropped, and it has also shifted to lower-priced units. That means larger floorplans and luxury condos are sitting on the market for longer and likely are not seeing bidding wars.

With more people working from home, we expect developers will begin marketing larger (i.e., 2 and 3 bedrooms) apartments to meet buyer preferences. As the supply of more generous floor plans comes to the market, it may depress the values for small floor plan condos.

At Mortgage Sandbox, we would like developers to build 4 and 5 bedroom condos because:

• Not everyone can afford to buy a house for their family.

• Canadians who work from home need more room to segregate workspace from living space.

• Many Canadians with longer working hours find it challenging to stay on top of necessary house upkeep (i.e., mowing lawns, clearing eaves, shovelling sidewalks).

• Many people prefer to live in higher-density neighbourhoods with all the essential amenities within walking distance.

Metro Toronto Townhouse Prices

Still a challenge for first-time homebuyers

Toronto home prices are not affordable.

A first-time homebuyer household earning $97,000 (the median Metro Toronto household before-tax income) can only get a $345,000 mortgage. If they were to save a $85,000 down payment, they would only be able to buy a home valued at $430,000. The Median condo apartment price is over $600,000, so for them to buy a typical condo apartment, a household needs an inheritance or a very generous gift from family. For most people, that is not possible.

What about the rest of Canada?

Read the Ottawa Forecast, Montreal Forecast, Hamilton Forecast, and the Vancouver Forecast.

2. Where are Metro Toronto prices headed?

There is a lot of uncertainty in the forecasts for looking out toward 2027. Many of the forecasters we've surveyed have different expectations for:

• Will the federal government’s recent migration policy pivot lead to a shrinking population?

• Will mortgage rates drop to the 2 to 3 percent range that Canadians have grown used to?

• Will Trump impose a 25% tariff on Canada, leading to a trade war and recession?

How do we arrive at our forecast range? Check out our full assessment of the five factors that drive these forecasts. These five forces help explain why several forecasters are anticipating price drops.

At Mortgage Sandbox, we provide a price range rather than attempting a single prediction because many real estate risks can impact prices. Risks are events that may or may not happen. As a result, we review various forecasts from leading lenders and real estate firms. We then present the most optimistic estimates, the most pessimistic prediction, and the average forecast.

Would you like to learn more about real estate risk? We've written a comprehensive report explaining the uncertainty level in the Canadian real estate market.

Our forecast inputs:

• CMHC Housing Outlook

• Fitch Ratings Global Housing Forecast

• Reuters Housing Forecast Poll

• Royal LePage House Price Forecast

• RE/MAX Housing Market Outlook

• Canadian Real Estate Association Quarterly Forecast

• RBC Home Resale and Price Forecast

• TD Bank Economic Housing Outlook

• BMO Housing Outlook

• C1 Central 1 Ontario Outlook

3. Is this a good time to sell a Toronto property?

From a seller’s perspective, more changes in the market influence prices downward, so this year may be a better time to sell than in two years.

The annual real estate cycle usually favours sellers in the first half of the year.

Sellers should always consult a mortgage broker early to prioritize flexible loan conditions and reduce the risk of mortgage cancellation penalties. Find out more about the benefits of a mortgage broker.

Planning to Sell? Check out our Complete Home Seller’s Guide.

4. Is this a good time to buy Toronto real estate?

Prices have been falling, and supply is high, so prices could fall further. Mortgage rates are relatively high and falling. Also, the annual real estate cycle usually favours buyers in late summer and autumn.

These factors would lead buyers to conclude that later in 2025 or 2026 will be a better time to buy than now.

It's almost impossible to time the market perfectly. However, if you are buying your forever home and don't plan to sell for ten years, the risks of buying now are lower than a year ago.

If you are considering buying, be sure to drive a hard bargain and pay as close to market value as possible. Also, don't bite off more than you can chew when it comes to financing.

Planning to Buy? Check out our Complete Home Buyer’s Guide so we can walk you through the end-to-end process and get you ready to buy your new home!

Here are some recent headlines you might be interested in:

• Canada housing market unlikely to surge despite plunging interest rates (MPA | Mar 14)

• Millennials, gen Z in 'Goldilocks moment' to jump on Canada's property ladder (Financial Post | Mar 12)

• Bank of Canada cuts interest rate to 2.75% as country faces 'new crisis' from tariffs (CBC | Mar 12)

• Housing market faces “uncertainty” amid economic and geopolitical shifts: CMHC (REM | Feb 10)

• Tariff threat, recession fears will slow Toronto’s real estate market, experts say (The Toronto Star | Feb 06)

• Toronto home sales expected to rise 12% this year, but board says January saw drop (CBC | Feb 06)

• Buyers’ market: Toronto-area January home sales down nearly 8 per cent year-over-year as prices creep up (The Toronto Star | Feb 05)

• How a trade war and U.S. tariffs could hit Canada’s housing market (Global News | Jan 29)

• Toronto's condo rental market spiked in 2024, data shows (RENX | Jan 22)

• Canada doesn’t need bigger cities to solve the housing crisis, report finds — it needs more cities (The Toronto Star | Jan 21)

• Toronto new condo sales fall to 28-year low as investors retreat (BNN Bloomberg | Jan 16)

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