What Awaits the GTA Housing Market in 2025
Discover expert insights into the GTA housing market for 2025. Will the growth sustain? Who will buy, and what will sell? Read forecasts from industry insiders to see what’s in store.
The GTA housing market is stirring up anticipation for 2025 as experts weigh in on what lies ahead. With shifting economic factors and evolving buyer behaviors, this year is shaping up to be a pivotal one for real estate in the region.
“It feels like they just woke up.”
“Normally, I’m planning vacations around now,” Toronto realtor Susan Gucci told STOREYS in late-November. Instead of a typical holiday season slowdown, Gucci finds herself working with clients eager to capitalize on lowering rates.
Her experience mirrors what the latest data suggests: buyers are gradually reentering the market. After months of sluggish activity, organizations like the Toronto Regional Real Estate Board (TRREB) are forecasting brighter days ahead. TRREB President Jennifer Pearce noted back in July, “Expect sales to accelerate as buyers benefit from lower monthly mortgage payments.”
Renewed Market Momentum
This renewed momentum was evident in the latter part of 2024, with home sales in the GTA jumping by 44% in October and 40% in November, compared to the previous year. Prices edged up by 2.6% in November, suggesting that 2025 could bring more stability.
But is this growth sustainable? What types of properties will dominate sales? And who will be the key players driving the market? STOREYS spoke to industry insiders to uncover what the future holds.
A Changing Economic Landscape
As 2025 begins, the economic environment looks promising. Interest rates have dropped to 3.25%, inflation has stabilized at 2%, and while unemployment hovers at 6.8%, experts like BMO’s Senior Economist Robert Kavcic remain optimistic.
“We’re actually expecting growth to pick up a bit next year,” Kavcic explains. “On the inflation front, we’re back to where we need to be […] which is good for housing.”
However, Kavcic highlights the lingering affordability crisis, saying, “Valuations got so stretched the last couple years that even though prices and interest rates have come down, it’s still not, quote unquote, ‘affordable’ for many.”
What Buyers Can Expect in 2025
The market is showing signs of favoring first-time buyers, thanks to recent mortgage reforms. These changes, including expanded eligibility for 30-year amortizations and a higher mortgage insurance cap, are expected to make homeownership more accessible.
“First-time homebuyers are looking at other options now over condos and seeing if they can buy a townhouse or a semi-detached or a home,” says Toronto-based realtor Jennifer Dernek.
Meanwhile, single-family homes are leading the demand, with limited inventory driving competitive bidding. “In mid-November, a small Leslieville semi-detached listed at $1,249,000 ended up selling for $1,812,000,” Gucci shares.
Conversely, the condo market continues to face challenges with nearly 40,000 units of supply in the GTA. Urbanation President Shaun Hildebrand notes that this excess inventory will likely delay any significant price increases in the condo segment until 2026.
Key Trends to Watch:
- Rising Sales Activity: TRREB projects stronger market activity, particularly in spring 2025, as lower borrowing costs entice more buyers.
- Single-Family Home Demand: These properties are seeing faster appreciation compared to condos due to their scarcity.
- First-Time Buyer Dominance: New mortgage rules are empowering this demographic to explore beyond condos, diversifying the demand landscape.
- Inventory’s Critical Role: Sustained supply will be essential to maintaining balanced growth and avoiding sharp price hikes.
Conclusion:
The GTA housing market in 2025 is poised for growth, driven by economic adjustments and policy changes. While affordability remains a challenge, first-time buyers and strategic investors are expected to play key roles in shaping the year ahead.
By staying informed and proactive, buyers and sellers can position themselves to take advantage of this dynamic market.
