As we move past the first quarter of 2025, the Canadian real estate landscape is proving to be anything but uniform. While many predicted a sluggish start, the reality on the ground is far more nuanced. Economic uncertainty, shifting buyer behaviour, and political factors — including the upcoming federal election on April 28 — are all playing a role in shaping today’s market conditions.
A Tale of Multiple Markets, Not Just Two
A recent Royal LePage article characterizes Canada’s real estate market as a “tale of two markets” — with activity trending up in more affordable regions and stagnating in more expensive ones like Toronto and Vancouver. While this framing might make for a tidy headline, it oversimplifies what's happening in cities like Toronto.
In fact, Toronto doesn’t have two markets — it has five. Let’s break it down:
Misleading Headlines About Falling Prices
Many national headlines paint a picture of price declines in Toronto — a 2.7% drop, according to some reports. But these numbers average out a city that’s incredibly diverse. When buyers hear that “Toronto prices are down,” they may expect discounts in the city’s most sought-after neighbourhoods. In reality, homes in those areas are still competitive, often attracting multiple offers and selling quickly.
GTA Markets Show More Weakness
While the 416 is relatively resilient, surrounding areas in the 905 are seeing more significant corrections:
This contrast further underscores the need to look beyond averages when evaluating the market.
Economic Outlook and Political Factors
Confidence in the economy remains mixed. According to the same Royal LePage report, 49% of Canadians feel confident about the economy, while 43% do not. That leaves some room for interpretation — especially considering volatility in global markets, concerns around trade, and rate decisions from the Bank of Canada.
The Bank held interest rates steady in both March and April, which brought some short-term clarity. Still, housing affordability remains a pressing issue for many Canadians. Discussions around GST relief on new builds and adjustments to down payment requirements could help, but more systemic solutions are needed to address long-term affordability.
Where Do We Go from Here?
Despite the cooling headlines, demand remains strong in key areas. The gap between condo prices and freehold properties continues to widen, and that may have long-term implications for affordability and supply.
Royal LePage originally forecasted a 5% national price increase for 2025, but they’ve revised that down slightly to reflect softer activity in Ontario and British Columbia. Even so, upward pressure remains in Toronto’s freehold market.
The first quarter of 2025 has revealed a complex, segmented housing market in Toronto — one that defies simple narratives. Depending on what you're buying (or selling), and where, your experience could be drastically different from what national statistics suggest.
Whether you're actively participating in the market or just observing from the sidelines, understanding the story behind the numbers is more important than ever.
A Tale of Multiple Markets, Not Just Two
A recent Royal LePage article characterizes Canada’s real estate market as a “tale of two markets” — with activity trending up in more affordable regions and stagnating in more expensive ones like Toronto and Vancouver. While this framing might make for a tidy headline, it oversimplifies what's happening in cities like Toronto.
In fact, Toronto doesn’t have two markets — it has five. Let’s break it down:
- Toronto Proper vs. Greater Toronto Area (GTA):
- Freehold Market:
- Townhouses:
- Larger Condos:
- Smaller Condos and Studios:
Misleading Headlines About Falling Prices
Many national headlines paint a picture of price declines in Toronto — a 2.7% drop, according to some reports. But these numbers average out a city that’s incredibly diverse. When buyers hear that “Toronto prices are down,” they may expect discounts in the city’s most sought-after neighbourhoods. In reality, homes in those areas are still competitive, often attracting multiple offers and selling quickly.
GTA Markets Show More Weakness
While the 416 is relatively resilient, surrounding areas in the 905 are seeing more significant corrections:
- Detached homes: down 4.3%
- Semi-detached: down nearly 7%
- Townhouses: down 4%
- Condos: down 5%
This contrast further underscores the need to look beyond averages when evaluating the market.
Economic Outlook and Political Factors
Confidence in the economy remains mixed. According to the same Royal LePage report, 49% of Canadians feel confident about the economy, while 43% do not. That leaves some room for interpretation — especially considering volatility in global markets, concerns around trade, and rate decisions from the Bank of Canada.
The Bank held interest rates steady in both March and April, which brought some short-term clarity. Still, housing affordability remains a pressing issue for many Canadians. Discussions around GST relief on new builds and adjustments to down payment requirements could help, but more systemic solutions are needed to address long-term affordability.
Where Do We Go from Here?
Despite the cooling headlines, demand remains strong in key areas. The gap between condo prices and freehold properties continues to widen, and that may have long-term implications for affordability and supply.
Royal LePage originally forecasted a 5% national price increase for 2025, but they’ve revised that down slightly to reflect softer activity in Ontario and British Columbia. Even so, upward pressure remains in Toronto’s freehold market.
The first quarter of 2025 has revealed a complex, segmented housing market in Toronto — one that defies simple narratives. Depending on what you're buying (or selling), and where, your experience could be drastically different from what national statistics suggest.
Whether you're actively participating in the market or just observing from the sidelines, understanding the story behind the numbers is more important than ever.
