Toronto is poised to challenge Vancouver as Canada’s priciest real estate market in 2025, driven by rising demand and a robust housing market.
Royal LePage President Phil Soper predicts that Toronto’s home prices will rise at nearly double the rate of Vancouver’s this year. In November 2024, the average home price in Toronto reached $1,106,050, reflecting a modest 2.6% year-over-year increase. Vancouver, meanwhile, saw a slight decrease of 0.9%, with its average home price at $1,172,100.
“Economic variables in Ontario are propelling Toronto’s housing market forward,” Soper said. “We anticipate increased sales volumes across all segments of the market, with detached homes leading the way in price growth at approximately 6% this year.”
Market Trends
While Toronto’s housing market is expected to strengthen overall, the condo market remains a weak spot. Soper predicts condo prices will remain stagnant, with a slight 1% decline anticipated by year’s end.
“There’s still softness in the condo market,” he said, citing an oversupply of newly constructed units as a key factor.
Detached homes, on the other hand, are in high demand and expected to drive much of the market’s growth.
Competing Perspectives
Not all experts agree that Toronto will surpass Vancouver in housing prices. Cameron Forbes, General Manager of REMAX Realtron Realty Inc., believes Vancouver’s geographical constraints—its proximity to the ocean, mountains, and the Fraser River—will continue to drive higher land costs and sustain its position as the country’s most expensive market.
“Vancouver is more restrained in its ability to add supply,” Forbes said. “All things being equal, their prices will likely remain higher than Toronto’s.”
REMAX forecasts a more modest 1% increase in Toronto’s home prices across all property types this year.
Policy Changes Impacting the Market
New federal mortgage rules introduced in December are expected to fuel demand in 2025. The changes include:
- An increase in the price cap for insured mortgages from $1 million to $1.5 million, enabling buyers to qualify for higher loans with less than a 20% down payment.
- The introduction of a 30-year mortgage amortization period for first-time homebuyers.
These measures are likely to attract more first-time buyers and investors as interest rates gradually decline.
Soper advises sellers to remain patient as the market adjusts. “In a normal market, selling a home could take two to three months. Sellers should not be alarmed if offers take longer than a few weeks to materialize,” he said.
Toronto’s housing market peaked in February 2022, with an average home price of $1,334,062, before softening amid rising interest rates. As economic conditions stabilize, the city is positioning itself for a rebound in 2025, potentially reshaping the national real estate landscape.