Published November 18, 2024. Rates, prices and policy details reflect conditions at that time; check the current figures before acting on them.
The bears have dominated the headlines since 2022. But when I look at the actual data across segments, the correction is deeper than most people realize, and the conditions forming beneath the surface deserve serious attention.
I'll cut through the noise on this one, because it's a question I'm fielding daily. Will Toronto real estate fall further? The answer depends entirely on which market you're talking about, because 2025 is not a single story. Detached homes in the 905 suburbs, pre-construction condos in the downtown core, and purpose-built rentals in emerging neighbourhoods are each on distinct trajectories, shaped by different supply dynamics, buyer profiles, and financing structures. Treating them as one market is the fastest way to make a bad decision.
For freehold properties, meaning detached, semi-detached, and townhomes, the data is showing signs consistent with a bottoming process in most 416 postal codes. Benchmark prices stabilized through Q3 2024 and have posted modest month-over-month gains since, per TRREB's most recent report. This segment benefits from limited supply expansion (new detached home construction in Toronto has been structurally constrained for over a decade) and persistent end-user demand from families who've been priced out of the rental market. I'm not calling a bottom. I'm identifying conditions that historically precede stabilization. Further downside remains possible, particularly if rate relief stalls or macro conditions deteriorate.
Condos are a more complicated story, and I'm candid with my clients about that. Resale condo prices in the 416 are down 12–15% from peak, but the segment faces additional pressure from a record pipeline of approximately 28,000 units expected to deliver across the GTA through 2025–2026. Investor-owned units facing negative cash flow, combined with softening rents in certain micro-markets, have produced a wave of motivated sellers. My base case: further modest price erosion of 3–5% in this segment through H1 2025. Not a crash, but not a floor yet either.
So what prevents a bigger decline? Three structural factors that I keep coming back to. First, Toronto's population continues to grow faster than housing supply. Provincial population projections have the city adding several hundred thousand residents over the next decade. Second, construction costs remain elevated, keeping replacement cost well above current resale values for most property types. Third, the Bank of Canada's rate-cutting cycle removes the acute financial stress that would be required to trigger forced selling at scale. The ingredients for a crash simply aren't there, though that's not the same as saying we've seen the last of the softness.
Here's my honest read: expect selective further softness in the condo segment, while freehold properties are approaching levels consistent with historical bottoming patterns. For buyers whose financial position is sound and whose investment thesis is clear, the conditions merit serious evaluation, not because the bottom is confirmed, but because preparation outperforms paralysis in every cycle I've lived through.