Toronto’s housing market has been aggressive, to say the least. In 2022, the typical asking value of a brand new apartment within the Higher Toronto and Hamilton Space (GTHA) peaked at practically $850,000! Consultants imagine that, after a few years of pandemic uncertainty, pent-up demand overflowed, sending the true property market into overdrive.

Desk of contents

Nevertheless, the market is cyclical, and with excessive highs come heavy lows. Rising rates of interest, mixed with unreasonably excessive prices for items that received smaller and smaller, created a cooling impact. This prompted builders to cancel or reduce on new builds, and as of now, it’s a purchaser’s market.

Given present market circumstances in Toronto, it’s in actual fact a very good time to purchase a apartment. However, making such a big buy at all times comes with dangers that must be evaluated.

The value is true

It’s nonetheless a stretch to say that Toronto condominiums are inexpensive, however costs are definitely extra affordable now than they have been 3 years in the past. An April report launched by the Toronto Regional Actual Property Board (TRREB) states that the typical value for a apartment is $710,724 inside the Toronto space, and roughly $618,196 inside the better Toronto space.

Economists from TD predict that by the tip of 2025, apartment costs in Toronto can have dropped 15% to twenty% from the third quarter of 2023.

TD estimates that almost 75% of the apartment market is investor-driven. That will clarify, at the very least partly, why provide stays excessive despite the fact that tasks have slowed. Traders purchase with the intention of benefiting from the property, however with the upper rates of interest and lack of development within the rental market, they could have a tough time breaking even proper now.

Extra stock available on the market

When bidding wars have been frequent, patrons have been competing for small items that have been cheaply made and overpriced. However now that the market has cooled, individuals have had time to query why they’d spend a lot on one thing that gives them with low worth. They’re saying no to tiny bachelor items or 1-bedrooms that received’t maintain their worth. Plus, elevated alternative supplies patrons with extra negotiating energy on value.

Q1 2025 condominium gross sales amounted to three,794 within the GTA, down 21.7% in comparison with 4,843 gross sales in Q1 of 2024, reviews TREBB. There have been 14,544 new listings in Q1 of this 12 months – up 25.2% year-over-year from 11,614.

33% of gross sales have been for 2-bedroom items, whereas 7% have been for 3-bedroom items. Just one% of Toronto apartment gross sales have been for bachelor items in Q1 of 2025, and 18% have been for 1-bedroom items.

Political elements

U.S. politics and tariff threats have created an extra layer of instability for people who find themselves already fighting the price of dwelling. They’re holding off on making the largest buy of their lives and as a substitute assessing how their funds may look within the subsequent few years.

Lastly, federal policymakers have capped immigration, that means there will probably be much less demand for rental or “inexpensive” items. Consequently, rents in lots of cities are coming down after years of steep will increase.

In abstract, patrons who’re presently on the lookout for a Toronto condominium:

Have extra negotiating energy because of lack of demand
Can capitalize on good areas that may have been too costly just a few years in the past
Might even see bigger areas in new buildings since builders are having difficulties promoting tiny dwelling areas
Are in a very good place to make an knowledgeable buy

Before you purchase

Patrons nonetheless have to do their analysis and crunch the numbers earlier than they buy a condominium. As talked about earlier, costs are higher, however that doesn’t imply they’re inexpensive for everybody.

Moreover, sellers may be attempting to make use of the buyer-friendly market circumstances to dump items that comes with a number of long-term or hidden prices.

Analysis constructing financials, discover out if there are upcoming assessments, and guarantee you’ll be able to deal with modest volatility.

Take note of the small print

If you’re shopping for a pre-construction apartment, be sure to analysis the builder utilizing the House Development Regulatory Authority’s Builder registry (HCRA). The HCRA licenses builders and supplies info on any disciplinary historical past.

The builder must also offer you all the paperwork listed under. Assessment them rigorously with a lawyer:

Pre-construction settlement of buy and sale
Info for patrons of pre-construction condominium properties
The condominium house addendum
Tarion guarantee info sheet
Disclosure assertion
Ontario’s residential condominium patrons’ information

Be sure you perceive issues like what occurs in case your occupancy date is delayed or the mission is cancelled utterly.

For those who’re fascinated by a resale unit, tour the property, perceive what’s included within the buy value, and evaluate the apartment company’s governing paperwork before you purchase.

If doable, schedule a tour after work hours when persons are house to evaluate if there may be sufficient soundproofing. And guarantee you might be snug with the constructing’s monetary info. Be careful for recurring particular assessments or suspiciously low apartment charges. Remember the fact that older buildings will usually require extra upkeep work than new builds.

Ask about much less conventional facilities reminiscent of parcel lockers or resident portals.

Assessment assembly minutes so you may get a really feel for what the group is like and what points it’s presently coping with. Discover out what the owner-to-renter ratio is, and if short-term leases are allowed.

Listed below are some issues it’s best to do earlier than shopping for a resale unit:

Get hold of a standing certificates
Discover out the standing of the reserve fund and age of the constructing
Ask about month-to-month apartment charges and the way a lot they’ve elevated over the previous decade
Learn and reread the governing paperwork
Discover out what facilities can be found to you
Ask about present or previous litigation
Discover out if the unit continues to be coated by any remaining new house warranties or protections below the Ontario New House Warranties Plan Act

Don’t borrow greater than you want

From early 2022 to the primary half of 2023, the prime price steadily elevated in response to the Financial institution of Canada’s efforts to regulate excessive inflation. Throughout this time, the Financial institution of Canada applied a sequence of 10 price hikes, pushing the in a single day lending price to five% by mid-2023. This resulted within the prime price rising to 7.2%.

Unsurprisingly, the development reversed in the course of 2024. By March 2025, the Financial institution had applied 7 consecutive price cuts, lowering its benchmark price from 5% to 2.75%, providing much-needed aid to debtors.

It’s unlikely the in a single day price will dip under 1% once more, however nobody can say for sure what the speed will probably be 10 years from now. Due to this fact, it’s essential to calculate what you’ll be able to afford rigorously.

Get pre-approved for a mortgage so precisely what your funds is earlier than you begin making provides. And don’t borrow greater than you want.

Even with the stabilization of in a single day charges, Ontario’s mortgage delinquency price soared to file highs within the first quarter of 2025, marking probably the most extreme year-over-year spike within the nation.

The province’s 90+ day mortgage delinquency price surged by 71.5% from the identical interval final 12 months, reaching 0.24%, based on Equifax Canada’s newest report.

Contemplate private circumstances

Shopping for a apartment continues to be a giant danger. If you’re a contract employee, or work in a unstable trade, then chances are you’ll be higher off renting.

You must also take into account what you need your future to seem like, and whether or not the area you need will nonetheless be appropriate in 10 years. For those who hope to get married and/or have youngsters within the close to future, a 1-bedroom apartment might not be your best option for you.

What’s subsequent?

Will the apartment actual property market proceed to plummet? Ought to patrons maintain off just a little longer to see if they will get an excellent higher deal?

Sadly, there aren’t any definitive solutions to those questions. Nevertheless, specialists speculate that the market has not hit all-time low simply but. Gross sales may stay low into the start of 2026, however that each one will depend on whether or not financial confidence improves within the months forward, and the demand for condominium items improves.

Ultimately, the market will favour sellers once more, however for now, severe patrons ought to do their analysis and reap the benefits of the apartment surplus.