- Feb 8
- 5 min read
Updated: Feb 15
Feb 7 2025
With all the uncertainty in our economy to start the year I thought it would be helpful to send an update on what I'm seeing both on the ground and in the stats for the Toronto and Greater Toronto Area Real Estate Markets, where the market is today and where I think it may be headed.
Whether you are actively in the market or a casual observer its always good to understand current market dynamics and changes we may anticipate in the market over the next few months. Below is my February 2025 update unpacking the numbers to end 2024 and how I think 2025 will begin. I hope you find this helpful.
As always if you have any questions, comments or concerns feel free to email me or to set up a No Obligation Phone Call you can clink this link.
Toronto Real Estate Newsletter – February 2025
We are well into the new year, and the Toronto real estate market is setting the stage for what could be a pivotal 2025. While home prices have remained mostly flat for over a year, we could now be seeing the beginning of a shift—listings continue to increase in both the condo and freehold sectors, sales are sluggish to start the year and uncertainty is in the headlines. Let’s break down what’s happening in the market today and what the latest data is telling us.
Breaking Down the January 2025 Numbers
- Sales for all home types for Jan 2025 were down 7.9% from Jan 2024
- Listing up a whopping 49%, 12,392 new listing Jan 2025 vs 8,337 in Jan 2024
- Active listing for all home types currently available on the market for the GTA sitting at 17,157 Jan 2025 vs 10,083 Jan 2024
In the summer months condo inventory spiked to over 10,000 units available for sale in the GTA, the most we have ever seen on record in one month, that inventory currently sits around 11,000 units.
Despite the increase in listing activity, the average home price across all property types in the GTA was $1,040,994 in Jan 2025 a 1.5% increase year-over-year. This confirms what we’ve been seeing—prices have been largely stable and holding, they haven’t moved meaningfully in either direction. The big question is will this continue or will we see prices come down in this well-supplied market as we move forward.
Market Dynamics: Using Month Of Inventory to Better Understand the Market
We use the Months of Inventory (MOI) metric to gauge market conditions. As of January:
Overall MOI for the GTA sits at 4.8 months, which suggests a balanced market for all home types.
0-3 Months (MOI) is usually a very competitive market where prices tend to increase
3-6 Months is usually a balanced market where prices tend to stay flat
6+ Months is usually a strong buyers market where prices tend to come down
Condos have an MOI of 6.2 months, meaning buyers have plenty to choose from, and sellers need to be strategic about pricing, buyers currently hold the negotiating power.
Freehold properties have an MOI of 3.9 months, showing stronger demand relative to supply but still not leaning fully into a seller’s market.
For context, at the peak of the market in spring 2022, overall MOI was below 1 Month, indicating an extreme seller’s market with rapid price growth. We are nowhere near those conditions today.
More Supply, Softer Demand
Buyers, you have options, take your time but be actively looking as you never know when a deal will show up. I’m seeing more and more opportunities for buyers being flexible when it comes to style of home, especially if they don’t mind putting their own touches and updates on a home thats a bit dated or they are flexible with their neighbourhood. Homes that need some work, maybe don’t look as new or polished or are multi-unit homes with 3 units or more can be had for less as there is softer demand for those types of homes.
Key takeaway: Buyers in the condo market have the most leverage right now. If you’re looking to purchase a condo you have choice and should negotiate a lower price to protect yourself from the market possibly slipping further in months to come.
Turnkey renovated detached and semi-detached homes are showing healthier inventory than previous years but prices have remained steady with some of the strongest activity in well-connected neighbourhoods near transit and top schools.
While freehold listings are increasing, demand is holding up better compared to condos, largely because there are fewer alternatives for those looking to upsize or buy a family home.
What Will Drive Market Activity?
A few key factors are shaping the current market landscape:
Mortgage rates remain a critical factor. Many buyers have been on the sidelines, waiting for rate cuts. While rates are still higher than they were in 2021, some buyers are adjusting to the new reality and moving forward with purchases understanding we will not see those low rates again for a long time.
More inventory means more choice. With listings increasing, buyers don’t feel the same pressure to rush into deals, leading to longer days on market and more negotiating room.
Upcoming policy changes could influence demand. New federal and provincial housing policies, particularly those affecting first-time buyers, could shift buyer sentiment as they take effect in the coming months.
Looking Ahead: What to Expect in Spring 2025
Traditionally, the spring market buyers start in January, not April. The busiest time for sales is typically February through May, and early indicators suggest that this year will be no different. We are seeing buyer inquiries, buyers looking to upsize, downsize and some first time home buyers wanting to enter the market, however the big question is whether this momentum stays strong for the next few months and into the fall market and will translate into price appreciation or will we see a initial burts of buyers enter and a slow middle part of the year and inventory continues to rise. This remains to be seen.
Although I’m not a fan of trying to predict the sometimes up and down GTA housing market my prediction from what Im seeing both on the ground and in the data suggests prices will continue to stay flat with most freeholds and trend downward for condos for the first half of the year, demand will grow as rate cuts continue and many buyers on the sidelines will see opportunities to buy a home at their pace and perhaps get a value buy. Where it goes from there is anyones guess.
For sellers, inventory continues to rise, expect a competitive market for sellers. Proper pricing, presentation of homr and the right marketing will be critical to stand out.
For buyers, this could be one of the best times in recent memory to find a home without the intense competition of years past and the chance to negotiate a great price.
Final Thoughts
While the market remains balanced for now, conditions are changing. If you’re considering buying or selling in 2025, understanding market trends will be key. Take your time to talk through the process, prepare ahead of time by speaking to your lender and real estate agent and be sure to weigh the pros and cons of renting vs buying or selling first vs buying first if applicable. Look at your living situation, your commute to work, how much space you realistically need. This will help you understand the home type and neighbourhood type you want to be in while remembering to stay on budget.
As always, if you have questions about your specific situation, feel free to reach out. Here’s to a busy and productive start to the year!
All data and charts via realosophy.com
