Toronto Area Real Estate Market Report ~ February 2025

Toronto’s housing market began 2025 on a muted note, with home sales continuing to hover near 20-year lows. Both house and condo sales declined compared to January of last year, reflecting ongoing cautiousness among buyers. While many in the industry—including myself—expected a slight uptick in demand this year, escalating economic uncertainty, fueled in part by the U.S.'s latest tariff threats on Canada, appears to have sidelined many prospective buyers.

At the same time, the number of homes available for sale has surged. The supply of houses on the market has climbed significantly year-over-year, though it remains in line with the levels Toronto saw in 2018 and 2019. The condo segment, however, is experiencing a more dramatic shift. New condo apartment listings hit an all-time high of 4,590, far surpassing the 10-year average of 2,751, while active listings surged to 6,913, more than double the historical average of 3,176.

This spike in condo inventory suggests that investors are increasingly looking to exit the market. With prices stagnating, rents softening, and interest rates still elevated, many are likely cashing out, adding further downward pressure on prices.

As we move further into 2025, the big question remains: how will the economic uncertainty, particularly the ripple effects of Trump’s renewed trade threats, shape the trajectory of Toronto’s housing market in the months ahead?

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By the Numbers: January 2025

The average price for a house in the Toronto area was $1,274,541 in January, up 1% from the same month last year. Last month's median house price was $1,130,000, unchanged from the same month last year.

House sales in January were down 9% over last year, while new house listings were up 56%. The number of houses available for sale at the end of the month, or active listings, was up 59% over last year. 

The current balance between supply and demand is reflected in the MOI, which measures inventory relative to the number of sales each month. In January, the MOI for houses increased slightly to 4.

The average price for a condo in the Toronto Area was $699,645 in January, down 1% from the previous year. The median price for a condo in January was $632,000, unchanged from the previous year.

Condo sales in January were down 11% over last year, and new condo listings were up 41%. The number of active condo listings was up 46% from last year. The MOI increased to 5.8. 

Browse detailed monthly statistics for January 2025 for the entire Toronto area market, including house, condo and regional breakdowns below. 

Canadians are rightly outraged by Donald Trump’s new tariffs, but many fail to grasp just how profoundly these measures will reshape Canada’s economy and its position in the world for years to come. As Martin Wolf outlines in the Financial Times, Trump’s trade policies are not just an economic nuisance—they mark a fundamental shift in global trade relations, with predictability as the chief casualty.

At the heart of Trump's trade philosophy is an irrational view of bilateral trade. He sees any country running a trade surplus with the U.S. as unfairly “ripping off” American workers, regardless of economic realities. For Canada, this accusation is particularly perplexing. If we exclude oil and gas, Canada actually runs a trade deficit with the U.S. The overall trade surplus exists because the U.S. imports Canadian oil and gas—resources it depends on. Yet, instead of targeting energy exports with the highest tariffs, which would actually address his supposed grievance, Trump has set tariffs at just 10%. A heavier tax on oil and gas would drive up fuel prices in the U.S., a politically disastrous move, so he avoids it. This exposes the incoherence of his trade policies, which seem to prioritize political optics over economic logic.

Trump’s recent fixation on fentanyl smuggling from Canada follows a similar pattern of unsubstantiated claims. While the opioid crisis is a genuine and tragic issue, there is no compelling data to suggest that Canada is a major fentanyl supplier to the U.S. Nevertheless, conservative Canadian politicians and pundits have eagerly amplified this narrative, hoping to align themselves with Trump. This cynical political opportunism ignores the actual sources of the fentanyl crisis while adding fuel to Trump’s anti-Canada rhetoric.

Perhaps most disturbing are Trump’s repeated musings about annexing Canada. This is not just an absurd fantasy—it is a direct contradiction of the principles underlying the NATO alliance and decades of close diplomatic relations. His willingness to float such ideas underscores his disregard for international norms and Canada’s sovereignty.

As Wolf aptly puts it, “Predictability is the victim of Trump’s tariff threats.” Businesses, investors, and households thrive on stability. When Canada’s largest trading partner is governed by a man who makes economic policy based on personal grievances rather than strategic thinking, it creates a climate of chronic uncertainty. Companies hesitate to make long-term investments when the rules of trade can change overnight. Families thinking of buying homes or making career moves are now second-guessing their future. This uncertainty will weigh on Canada’s economy for years to come, long after the immediate shock of the tariffs has faded.

The biggest cost of Trump’s tariffs may not be the billions lost in trade—it may be the erosion of economic confidence and predictability that are essential for prosperity. Canadians may feel betrayed today, but the real damage will only become clear in the years ahead.

In June 2024, I wrote a column titled "Is Canada Propping up Condo Investors to Prevent Prices From Falling," highlighting an alarming and growing trend—blanket appraisals.

Many new condominiums completed in 2024 were not worth what buyers had paid for them because they had purchased them at a 30-40% premium above resale prices in 2019 or 2020, while resale prices have remained relatively flat since then. This typically presents a challenge when buyers seek mortgage financing.

Imagine a buyer who purchased a condominium for $1M and contributed $200K in deposits to the builder. By the time they were ready to close, the bank appraised the unit at just $800K. Normally, the buyer would need to provide an additional $160K—20% of the new $800K valuation—since their original deposit was lost due to the decline in value.

However, with new condos, banks didn’t require buyers to come up with an additional deposit because they pretended the condo was worth the original purchase price—a practice known as a blanket appraisal. In effect, the bank issued an $800K mortgage on a condo worth only $800K, effectively creating a zero-down-payment mortgage.

When I originally published my column, I framed it as a question because banks had not admitted to this practice, and proving it was difficult—even though it was an open secret in the real estate industry.

This week, however, a Globe and Mail article revealed that Royal Bank has admitted to offering buyers blanket appraisals on new condos.

The article describes a buyer who paid $2.2M for a condo in Leaside, which appraisers determined is now worth only $1.6M. Unable to bridge the $595K gap between the purchase price and the actual market value, the buyer was informed by the builder that Royal Bank was willing to turn a blind eye to the property’s real value.

“According to documents viewed by The Globe, the developer, Gairloch, sent him an e-mail saying it had partnered with Royal Bank of Canada to offer a so-called blanket appraisal, which would allow buyers such as Mr. Barardziej to secure mortgages for their units by having the bank appraise the unit at the original contracted price. Mr. Baradziej declined.”

This revelation is significant for two reasons.

First, it demonstrates just how far Canada’s banking regulators are willing to go to prop up the housing market. They are prepared to pretend a $1.6M condo is worth $2.2M in order to prevent condo prices from falling.

Second, this practice could have serious implications as Toronto’s new condo completions in 2025 will likely face the same issue. It remains to be seen just how far this will go and what the long-term consequences will be.

WATCH NOW: Why Housing is Political - and What Regular Economic Theory Gets Wrong About It 2025

When most people think about housing policy in Canada, they think of it through an economic lens – supply and demand.

But housing policies are political, the same way health policies are political. Canadians and Americans want affordable healthcare, but their approaches to achieving that goal are fundamentally different.

Canada’s state-funded universal healthcare system takes a very different approach to providing healthcare than the US, where healthcare operates as a privatized for-profit business. 

What if Canadian healthcare economists argued that the solution to Canada’s healthcare challenges, including a significant shortage of doctors, is to move towards a privatized system where healthcare is no longer seen as a social right for all Canadians but as a for-profit business for private enterprise, a lot like the United States. According to their theories, removing government restrictions on healthcare would unleash a tremendous amount of new capital into the healthcare system, encouraging private corporations to build more hospitals and healthcare facilities, and this rapid increase in the supply of new healthcare facilities will eventually lead to better healthcare and lower fees for all Canadians. 

If we heard experts making these arguments, it would be very clear that their views are driven by a conservative political ideology. 

Similarly, housing policy is driven by conservative pundits who believe that if governments remove all restrictions on the supply and demand for housing, the free market will solve our housing problems. They are against restrictions on the supply of housing but they are also against any restrictions on the demand for homes as well. They are against restrictions on short-term rentals, corporations buying homes, foreign buyer taxes and vacant home taxes, to name a few. 

They believe that if you make housing a more lucrative financial investment for builders and investors buying homes, the private sector will have an incentive to unleash so much supply that it will eventually lead to lower housing costs. 

They are trying to apply the US approach to healthcare to housing in Canada by making homes a for-profit business. This conservative advocacy has changed the role that houses play in Canada’s society. As Statistics Canada noted: 

“Real estate and homes are no longer just a place to live—instead, Canadians are in the business of real estate”

It took me a while to fully understand why I disagree with so many of Canada’s housing commentators when in theory, we are striving for the same goal – affordable housing. 

Our differing views are rooted in our different political ideologies, which shape how we view the problem, our proposed solutions, and the end goal we are striving for. 

While they think a US free market approach is the solution to our housing crisis, I believe their vision is taking us further down the road we are on - a world where fewer families can afford and more investors are buying homes. 

I think moving back to a world where homes were just a place to live rather than a lucrative financial investment is the only way to ensure housing is affordable for the next generation. 

Monthly Statistics

House Statistics

House sales (low-rise freehold detached, semi-detached, townhouse, etc.) in the Greater Toronto Area (GTA) in January 2025 were down 9% compared to the same month last year.

New house listings in January were up 56% compared to last year.

The number of houses available for sale (“active listings”) was up 59% in January compared to the same month last year.

The Months of Inventory ratio (MOI) looks at the number of homes available for sale in a given month divided by the number of homes sold in that month. It answers the following question: If no more homes came on the market for sale, how long would it take for all the existing homes on the market to sell, given the current level of demand? The higher the MOI, the cooler the market is. A balanced market (a market where prices are neither rising nor falling) is one where MOI is between four to six months. The lower the MOI, the more rapidly we would expect prices to rise.  

While the current level of MOI gives us clues into how competitive the market is on-the-ground today, the direction it is moving in also gives us some clues into where the market January is  heading. 

The MOI for houses increased to 4 in January.

The share of houses selling for more than the owner’s list price fell to 29% in January.

The average price for a house in January 2025, $1,274,541, was up 1% from the same month last year.

The median house price in January was $1,130,000, up unchanged over last year.

The median is calculated by ordering all the sale prices in a given month and then selecting the price at the midpoint of that list such that half of all home sales are above that price and half are below that price. Economists often prefer the median price over the average because it is less sensitive to big increases in the sale of high-end or low-end homes in a given month, which can skew the average price.  

Condo Statistics

Condo (condominiums, including condo apartments, condo townhouses, etc.) sales in the Toronto area in January 2025 were down 11% compared to the same month last year.

New condo listings were up 41% in January over last year.

The number of condos available for sale at the end of the month, or active listings, was up 46% over last year.

Condo months of inventory increased to 5.9 MOI in January. 

The share of condos selling for over the asking price fell to 15% in January.

The average price of a condo in January was $699,645, down 1% from last year. The median price was $632,000, unchanged from last year.

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