Toronto’s Housing Market is Shifting – Is It Finally a Buyer’s Market?
Toronto’s 2025 housing market started off with a mix of surprises and uncertainty. If you’ve been thinking about buying a home in the Greater Toronto Area (GTA), 2025 might finally be your year. There are way more homes hitting the market, prices are feeling the pressure, and buyers suddenly have more power than they’ve had in a while. This article breaks down the three key trends buyers need to know for the upcoming spring housing market:
- More homes are finally being listed for sale.
- Condos are having a tough time selling.
- Different areas are seeing different trends.
More Homes, Fewer Buyers
For a long time, sellers held all the cards. But now they’re finally ready to sell.
January 2025 saw a huge spike in new listings—48.6% more than last year, jumping from about 8,300 homes for sale in January 2024 to over 12,300 this year. Total inventory also skyrocketed by 70%, which means buyers have a lot of options to choose from.
Here’s the catch – while more homes are flooding the market, sales actually dropped by nearly 8%. That tells us that sellers are eager to list, but buyers are in no rush to commit. Many are waiting for interest rate cuts before making a move, which means homes are sitting on the market longer. If this trend continues into the spring, we could be looking at a full-on buyer’s market.
Why Are So Many Homes Hitting the Market?
While most sellers are listing their properties voluntarily, there’s a growing number of homeowners who are being forced to sell because of financial strain – they’re feeling the pinch of higher mortgage rates and are struggling to make ends meet. This indicated by the rise in power of sale listings in the chart below, observed by realtors Robert Marsiglio and Peter Kiriouzoupoulos.
Condos Are Taking the Hardest Hit
If any part of the market is feeling the pressure, it’s condos. Here’s why:
- Condo sales fell 12.1% in the past year.
- Prices dropped 1.6%—the only housing type that saw a decline.
- Toronto condos are struggling even more than suburban ones, with a 14.5% drop in sales.
Why is this happening? The market is simply flooded with condos. About 31,000 new units are expected to be completed in 2025, meaning even more competition among sellers. Add in high mortgage rates making ownership expensive, and many first-time buyers just can’t afford to jump in.
For investors, this is tricky. High carrying costs and slower rent growth mean some landlords are struggling to turn a profit, which could push even more condo owners to sell. Unless demand picks up, condo prices might keep sliding.
Not Every Market is the Same
While condos are struggling, other types of homes are holding up better. Here are some interesting trends:
- Semi-detached homes in Toronto are hot: Sales for these homes jumped 25.7%—buyers see them as a sweet spot between affordability and space.
- Townhouses are gaining value: Prices for Toronto townhouses rose 5.1%, but in the suburbs, growth was minimal.
- Detached homes are steady: While they’re not booming, they’re also not seeing the same declines as condos.
Where’s the Market Heading in 2025 So Far?
A lot depends on interest rates. Right now, borrowing money is expensive, and many buyers are sitting on the sidelines, waiting for lower rates before jumping in. Predictions suggest rates might drop later in 2025, which could bring buyers back. But if more sellers keep listing homes and buyers keep waiting, prices could soften even more.
What Should You Do?
If you’re buying, now is a great time to negotiate. More inventory means less competition, and you might get a better deal – especially if you’re eyeing a condo. If you’re selling, be realistic with your price. Overpricing your home in a shifting market will only lead to longer wait times and potential price cuts. The real test will be the spring market. Will buyers come back, or will listings keep piling up? We’ll find out soon enough.
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