Two Predictions for Toronto's 2025 Housing Market

These days barely a day goes by without a client or colleague asking me what 2025 holds. Everyone wants to know where the market is headed. I am optimistic about Toronto real estate next year, and I think we will have a good, active market, mostly because mortgage rates are coming down.

I'm Moe Asgarian, a senior real estate broker in Toronto, ranked #47 worldwide with RE/MAX. I want to share my predictions for 2025, a year I think will bring growth across the board. Let me start with the numbers and then give you my own take.

What the RE/MAX Report Shows

Let's start with the latest RE/MAX report. Looking at all of Toronto, homes got about 1% more expensive from 2023 to the end of 2024, moving from an average of $1,013,000 to $1,114,000. The number of sales rose about 1.5%, even though rates were still very high in the first half of the year. Listings climbed too, up 18%, and 2024 saw roughly 56,800 transactions in total.

RE/MAX's Outlook for 2025

Following the trend, 2025 looks like a balanced market, one where prices stay roughly flat but sales rise somewhere between 10% and 12%. That is the pattern we saw in the last few months of 2024: homes do not get much pricier, but more of them change hands. RE/MAX expects total listings next year to rise 10%, which means more options for buyers. And it is not only Toronto. York Region, for example, shifts from a balanced market toward a seller's market, with prices up around 5%. The areas around Toronto look similar: a few percent of price growth, more sales, and more inventory. RE/MAX also runs a survey, and it shows Canadians generally feel positive about 2025. The biggest driver of that optimism is falling interest rates. Overall, prices are forecast to rise about 5%. One more hope for next year is a wave of first-time buyers, with Canada trying to make loan conditions easier for them, though the forecast is still that 70% to 80% of the market will be repeat buyers.

Royal LePage's Forecast

The second prediction I want to share is from Royal LePage. They have put out their own outlook and expect the GTA to see about a 5% price increase. The strongest growth is in detached homes, which they see rising around 7% on average. For condos, they do not expect much movement in 2025, and they see that market staying choppy. The common thread in their report, just like the RE/MAX one, is falling interest rates. Even a half-point drop moves the market a lot, and that momentum should carry through winter and spring as more buyers get convinced to jump in.

My Own Prediction for Freehold Homes

Here is what I think. Sales are picking up but prices are not rising at the same pace, mainly because there are so many homes on the market. I expect that to change, especially around Toronto and especially for freehold homes like detached, semi-detached, and townhouses. Those are selling fast, and as supply shrinks, prices start to climb. Falling rates plus tighter supply mean prices edge up in 2025. I do not mean condos jump 15% in January or freehold 22%. I mean that gradually, by year end, parts of the market rise somewhere between 2% and 4.5%.

The Condo Market: Opportunity and a Catch

I want to flag the condo market as a real opportunity for 2025. Just like in the second half of 2024, when we bought some excellent condos at exceptional, almost unheard-of prices for good clients, the setup is strong: financing is getting cheaper, prices are flat, and there are plenty of condos on the market. That is great for any buyer, especially first-timers. There is a catch, though. A big part of Toronto's condo market is investors, and they want small, cheaper units that are easy to buy and sell. So we have a flood of tiny condos. But first-time buyers are not investing; they want a condo to actually live in, and they feel they need something bigger. Vahid, one of our Team Asgarian members, sees this every day, showing clients plenty of condos that are simply too small for them. That mismatch is something we may see more of in 2025: the buyer is there, the money is there, but the right condo is hard to find.

I will keep sharing what I see for 2025, because the better we understand a market's strong and weak points, the better our investment decisions get. If you are thinking about selling or buying a condo, townhouse, or house, I can guide you. Fill out the form at the bottom of this page or book a free consultation. Stay well and take care.