General Takeaways 💡

Sellers 🤞: Modest price growth expected for freehold, low-rise home categories. Condo apartment owners looking to sell will fair better with units that stand out from cookie-cutter investor units.

Buyers 👍: Opportunities are out there, especially in the condo segment with high levels of inventory available for sale on the market. May see increased competition for desirable properties, especially with new mortgage lending rules and expected rate cuts.

Renters 👍 : High levels of rental condo inventory in the 416, expecting to see large delivery of new condo supply in the 905 regions as well in the foreseeable future; favourable conditions for renters looking to find a new home.

MARKET UPDATE 🏠

Steady Growth Amid Economic Uncertainties

The Toronto Regional Real Estate Board’s (TRREB) latest Market Outlook and Year in Review report predicts a balanced housing market in 2025. With a steady increase in home prices aligning with inflation and lower borrowing costs encouraging buyer activity, the Greater Toronto Area (GTA) is expected to have a year of moderate growth.

2025 Market Forecasting:

• Total home sales: Projected at 76,000 (below 10-year average), a 12.4% increase from 2024 (67,610 Total transactions). 75,140 total sales in 2022, and 121,639 in 2021 for reference.

• Average home price: Expected to rise by 2.6% to $1,147,000. Moderate but still meaningful growth in price expected due to lower sales volumes in previous 2 - 2.5 years. Those that were on the sidelines will be thinking about making a move.

• Housing demand: Growth in single-family home sales will outpace the well-supplied condo market. With record number of condo completions continuing into 2025, and less number of single family homes being constructed, this makes logical sense.

“As we approach the 2025 spring market, lower mortgage rates will prompt more buyers to enter the market, driving transaction volume and price increases,” said TRREB Chief Market Analyst Jason Mercer. However, he cautioned that trade disruptions could negatively impact economic confidence, potentially dampening the housing market’s momentum.

Current Market Performance:

• January 2025 sales: 3,847 transactions, down 7.9% year-over-year.

• New listings: 12,392, up 48.6% from January 2024.

• Average selling price: $1,040,994, an increase of 1.5% from January 2024.

Economic Uncertainty and Its Impact on Housing

Canada’s economy faces uncertainty due to potential U.S. trade policy changes and lower immigration targets. Three possible scenarios are highlighted, with varying impacts on investment, employment, and consumer spending.

Potential Challenges:

• U.S. trade tariffs: A worst-case scenario could see tariffs of up to 25% on all Canadian exports, leading to a weaker dollar, job losses, and higher inflation.

• Lower immigration targets: Slower population growth could reduce overall economic activity and housing demand.

• Higher unemployment in 2025, expected to improve by 2026–2027.

• Mortgage renewals: Higher rates in 2025–2026 may put pressure on homeowners coming into renewals.

Despite these challenges, lower borrowing costs and a recovering economy are expected to gradually boost consumer spending and business investment over the forecast period.

Housing Market Trends and Future Outlook 

With mortgage rates set to decline further in 2025, pent-up housing demand may be observed moving further into this year. First-time and repeat home buyers looking to upgrade will be key drivers of market activity, particularly in urban centers where remote work is becoming less common.

Key Housing Trends:

• Resale homes will attract more demand than new builds due to affordability constraints. Premiums on new builds usually due to costs of construction(replacement value) and securing profit as a builder's business.

• Single-family homes will see stronger price appreciation than condo apartments. Simply a greater supply of condos seen in the current market plus it's a lower price entry point.

• Investors selling pre-construction condos may increase supply, softening condo price growth. This will inevitably affect the rental market pricing as well.

Regional Differences in Market Recovery

• Ontario & BC: Affordability challenges will slow recovery, keeping sales below 10-year averages.

• Alberta & Quebec: Stronger affordability will drive faster price and sales growth. Multifamily investment property options (with 5 or more units) in Alberta with favourable government backed financing program available currently.

Housing Starts and Rental Market Outlook

• New condo construction is expected to slow down due to lower investor interest, therefore, diminished sales activity in recent years will result in low construction starts from 2026 onwards. Supply constraints expected once inventory in the market gets absorbed.

• Rental market conditions will ease (favourable for tenants), with increasing supply leading to higher vacancies and slower rent increases, but affordability challenges will likely remain.

Final Thoughts

While economic uncertainty poses risks, the GTA housing market is poised for moderate price growth and increased sales volume in 2025, fueled by lower interest rates and improving affordability. For buyers and investors, the coming months may present new opportunities to navigate a shifting market landscape.

TWO CENTS 🪙

No-Phone Realtors

It’s the 21st century, there’s people who prefer messages over phone calls, especially with the rise of spam and scam calls. I’m the same way for non-urgent matters. But in real estate, where deals involve hundreds of thousands or even millions of dollars, timely communication is critical.

As a Realtor, I often need to reach other agents quickly. Yet, too often, just a generic brokerage office contact number is provided with no cell phone numbers to be found anywhere. This creates unnecessary delays, which can mean missed opportunities for buyers and sellers alike.

Recent example: I tried reaching an agent through their office, left messages with the reception people, and followed up via email; only to receive no response for over a week. Clearly a hindrance and a test of my client’s patience who were looking to make an offer on the property.

Realtors should be required to provide a direct contact number or, at the very least, have a reliable way to be reached promptly and efficiently. Anything less is a disservice to the clients we represent.

Just my two cents.