A Market in Motion: Smart Insights for Spring 2025

Spring is traditionally the most active season in real estate, but 2025 hasn't followed the usual script. Political uncertainty surrounding the upcoming Canadian federal election and ongoing instability south of the border have kept many buyers and sellers on the sidelines. As a result, this spring began slower than expected. But the tide is turning.

Let’s talk specifics.

The cottage and recreational property market north of the city has come to a near standstill. Showings are sparse—even on premium listings. In uncertain economic times, lifestyle properties are the first to feel the pinch. Buyers are prioritizing value and stability, not weekend getaways.

That said, the Greater Toronto Area (GTA) is telling a different story. Across the Golden Horseshoe, we’re seeing renewed momentum. Listings are increasing, and so is buyer engagement—at nearly every price point. This shift marks a clear change from the sluggish pace we saw earlier in the year.

What’s Happening with Prices?

Let’s cut through the noise. On average, detached home prices are down approximately 5–7% year-over-year. Condos—particularly smaller, non-family oriented units - are feeling a deeper correction, down around 15%.

This isn’t surprising. The condo segment, especially in the investor-heavy downtown core, has been oversupplied since last summer. Inventory levels remain high, and that’s putting ongoing pressure on prices. Unless those units are attractively priced or uniquely positioned, they’re struggling to move.

On the other hand, well-located, family-sized homes in the 416 and desirable 905 pockets are starting to attract serious attention again—especially if they're priced with today’s market in mind.

Rates, Stability, and What Comes Next

The recent interest rate cut—and more importantly, the Bank of Canada’s decision to hold steady—has given the market a much-needed psychological boost. Inflation is trending in the right direction, and if we see another rate hold at the next meeting (as expected), confidence will continue to build.

That confidence is already showing up in the volume of calls I’m getting from clients. Many are asking for updated valuations and market positioning. That’s always a leading indicator of increased activity. When homeowners start reassessing their portfolios, they’re preparing to act.

We’re seeing that play out in real time - new listings are climbing, especially in Toronto proper and the surrounding GTA. Smart sellers are getting ahead of the curve.

Bottom Line

This is a market that rewards preparation and strategy. Whether you're buying, selling, or just evaluating your options, informed decisions matter more now than ever. The opportunities are real—but so are the risks if you’re not properly aligned with current conditions.

If you're unsure where you stand or how to navigate what's next, let’s talk. I’m tracking the trends daily and can help you see around corners before the rest of the market catches up.

GST Eliminated for first-time home purchasers

We welcome the Government of Canada’s decision to eliminate the Goods and Services Tax (GST) on homes priced at or under $1 million for first-time homebuyers. This policy is a positive step toward addressing housing affordability challenges and supporting Canadians in achieving homeownership.

The rising cost of housing has been a significant barrier for first-time buyers in the Greater Toronto Area and across the country. By eliminating the GST, the federal government is providing much-needed financial relief – reducing upfront costs and making homeownership more attainable for young families and new buyers entering the market.

Realistically, this will hardly move-the-needle on affordability around the Toronto area, with very limited housing options under that $1M threshold, but it is certainly a step in the right direction.

How Could U.S. Tariffs Impact the GTA Housing Market?

With the impending U.S. tariffs on Canadian exports, many are wondering what this could mean for the real estate market, particularly in the Greater Toronto Area. While it may seem like an issue confined to international trade, these tariffs could have a direct impact on housing costs, construction, and market trends.

Higher costs for key building materials such as steel, aluminum, and lumber could push up construction expenses, leading to increased home prices and potential delays in new developments. If suppliers redirect their products to the Canadian market to offset the effects of tariffs, this won’t necessarily drive prices down. Instead, material costs may rise due to continued demand and potential supply shortages.

Another factor to consider is the Canadian dollar. If tariffs weaken Canada’s export sector, the loonie could decline against the U.S. dollar, making imported materials and construction equipment more expensive. Higher costs, combined with potential supply chain disruptions, could further drive up the price of new homes.

Beyond materials and currency fluctuations, there’s also the broader economic impact. If key industries like manufacturing and forestry face setbacks due to trade restrictions, job losses and economic uncertainty could slow housing demand. At the same time, inflationary pressures may prompt the Bank of Canada to raise interest rates, making mortgages and construction loans more costly. Developers may delay or cancel projects in response, further constraining housing supply.

For buyers and sellers, this creates a complex landscape. If supply tightens and costs continue to rise, affordability could become an even greater challenge. However, economic uncertainty might also lead to a temporary slowdown in demand, which could present opportunities for those ready to make a move.

The real estate market is always evolving, and staying informed is key. If you’re considering buying, selling, or investing, now is the time to have a strategic conversation about your next steps. Reach out to discuss how these changes could impact your real estate goals.

Sales over $5 million jump 58.5% in the fourth quarter of 2024

TORONTO’S LUXURY HOME MARKET RECORDS DOUBLE-DIGIT GROWTH

AS WAVE OF HIGH-END BUYERS FLEX PURCHASING POWER AMID MORE FAVOURABLE OUTLOOK

The Greater Toronto Area’s (GTA) luxury housing market shifted into high gear in the final quarter of 2024, with sales over $3 million climbing more than 40 per cent ahead of year-ago levels for the same period. Just over 360 freehold and condominium properties sold in Q4 2024, up from the 259 sales reported in Q4 2023, according to RE/MAX Canada.

“The impact of the first and second 50-basis-point rate cuts by the Bank of Canada radiated throughout the GTA in the fourth quarter, jumpstarting demand for high-end properties both within the city and suburbs. We’ve been expecting a surge in top-tier sales activity as the economic climate and corresponding pause in buying intentions prompted a build-up in pent-up demand. The fourth quarter did not disappoint.”

CHRISTOPHER ALEXANDER, PRESIDENT OF RE/MAX CANADA

Luxury home sales were almost equally split in the last three months of the year, with Toronto proper enjoying a slight edge (53 per cent), as buyers took advantage of suppressed housing values, particularly at uber-luxe price points between $5 million and $7.5 million. Sales over $5 million reported the strongest percentage gains, with more than 80 properties changing hands in the fourth quarter of 2024 – an increase of almost 59 per cent over the same period in 2023, according to MLS data from the Toronto Regional Real Estate Board (TRREB). A 41.2-per-cent increase was posted in home sales over $7.5 million (24 versus 17), while the number of homes sold over $10 million were on par with year-ago levels. “The momentum in the luxury segment has outpaced the overall market in 2024,” says Alexander.

“Affluent buyers appear to have acclimatized to Toronto’s higher land transfer tax structure, which went into effect on January 1, 2024. The initial shock of the tax hike has likely subsided, and purchasers are simply treating it as the cost of doing business. That said, nearly half of the high-end sales over $5 million reported by TRREB occurred on the outskirts of the city. Last year, sales in the 905 represented just 36 per cent of luxury homebuying activity.” While ideal market conditions – including pent-up demand, softer housing values and increased inventory levels – existed through much of 2024, the 100-basis-point drop in the overnight rate was the primary catalyst beyond stronger buyer enthusiasm. Secondary drivers such as growing consumer confidence levels, coupled with near-record highs in the stock market in 2024 also played a role, given that the NASDAQ closed the year up 30 per cent; S&P 500 was up 24 per cent; the Dow Jones was up 13 per cent; while closer to home, the S&P/TSX composite index rose 18 per cent. Along with the strong performance of financial markets, the easing of inflationary pressures was another factor that contributed to the rising fortunes of wealthy investors. “Profit-taking was widespread at year end, with many stakeholders converting paper wealth to material wealth,” explains Alexander, noting the scenario was playing out south of the border as well. Luxury real estate has bounced back in top tier U.S. markets including Miami, New York, Los Angeles and San Francisco in the final quarter of 2024.

“The uptick in home-buying activity sets the stage for a strong luxury market in 2025,” says Alexander. “After several years of softer sales at higher price points, affluent buyers have the confidence to move forward once again. Supply has been a considerable factor hampering strong buyer intentions and we expect that to continue. While we do expect to see more listings come on stream, they’re being offset by the increase in buyers moving off the sidelines.”

SUPPLY IMPACTING VALUE AT UPPER PRICE POINTS

While market conditions varied by neighbourhood in the fourth quarter, pockets with the tightest supply saw values hold steady, while those with greater selection experienced a five- to 10-per-cent decline, especially at the $5 million to $7.5 million price point. To illustrate, the average price of the 84 homes sold over $5 million hovered at $7.56 million in the fourth quarter of 2024, down almost seven per cent from the $8.1-million average price tag on sales during Q4 of 2023. Toronto’s Rosedale-Moore Park area experienced the strongest activity, with 13 sales in Q4, followed by Forest Hill South (7), Bridle Path-Sunnybrook-York Mills (5), and St. Andrews-Winfields (5). In suburban markets, Oakville (8) led the 905 in terms of sales over $5 million, followed by Richmond Hill (6), Vaughan (4), King (4) and Milton (4).

On a year-over-year basis, the fourth quarter swell pushed overall luxury home-buying activity ahead of 2023 levels. Sales over the $3-million price point were up almost four per cent in 2024, with 1,514 sales occurring throughout the Greater Toronto Area, up from 1,456 one year earlier. A 21-per-cent increase was realized in luxury sales over $5 million, with 298 sales reported in 2024, compared to 246 in 2023. Sales over $7.5 million climbed 18 per cent, with 72 properties changing hands in 2024, compared to 61 in 2023. Sales over $10 million were up 17.4 per cent, with 27 homes sold in 2024, compared to 23 sales one year earlier. Q4 sales represented 24 per cent of overall luxury homes sales in 2024, compared to 17.7 per cent in 2023. Single-detached luxury homes remained in high demand, while condominiums experienced a turbulent 2024 across all price points, with a serious influx of inventory evident in the city’s downtown core. However, luxury homebuyers are slowly re-entering the top end of the market, with recovery expected to result in a turnaround by year-end 2025 and in early 2026, as aging sellers make lateral moves to luxury condos. The primary reasons behind the move to condos in the GTA this year is opportunity, followed by safety and security. Some luxury condo developments are attracting interest—a sign of the changing tide. For example, a new luxury condo project in the Bridle Path with large units is selling well in pre-sales. While domestic buyers have been most active in the market this year, there has been a resurgence in luxury home-buying activity among young, landed Chinese immigrants, many of whom seek assistance from their parents abroad. China continues to grow in affluence, with significant purchasing power in all categories of luxury goods globally and real estate remains no exception, despite stricter policies on foreign ownership in several countries. The transfer of wealth from baby boomers will also continue to empower Gen X, Millennials and some Gen Z buyers, with billions of dollars poised to change hands in Canada over the next decade. In many cases, this is happening sooner in life in the form of an early inheritance gifted by living relatives. Statistics Canada reports that nearly one-third of all first-time buyers in Canada cover their down payment—in whole or in part—by money from parents or relatives. Wealth transfer is propping up home-buying activity across all segments, including the luxe and uber-luxe segment. In the World’s Wealthiest Cities Report released in mid-2024 by London-based Henley & Partners, Toronto was ranked 13th in the world for the number of high-net-worth individuals. Despite an expected slowdown in population growth, overall demand for properties in Toronto is expected to remain solid, especially for single-detached homes, particularly as that category comprises a smaller percentage of overall sales in the years to come and as price growth and limited supply push more detached homes in luxe price points.