Real estate president suggests the city is set to overtake Vancouver as the nation’s most expensive market
Toronto may surpass Vancouver as Canada’s most expensive housing market this year, as economic factors drive up real estate prices in Ontario’s largest city, a report from CP24 highlighted. Industry experts predict a strong year for Toronto’s housing market, with detached homes leading the way in price growth.
In November 2024, the average home price in Toronto rose to $1,106,050, a 2.6% year-over-year increase. In contrast, Vancouver’s average home price declined by 0.9% over the same period, settling at $1,172,100. While the two cities remain close in pricing, Toronto’s market is expected to rise at double Vancouver’s rate in 2025, according to Phil Soper, president of Royal LePage.
Market dynamics driving growth
“There’s a number of economic variables that are moving things ahead in Ontario and that’s translating into a strength in the housing market,” Soper told CP24.com. He anticipates increased sales volumes across all segments of Toronto’s housing market, including detached homes, townhouses, and semi-detached properties. Detached homes are projected to see the highest demand, with prices expected to grow by about 6%.
However, Toronto’s condo market is predicted to lag. “There’s still softness in the condo market,” Soper noted, adding that prices for condos are expected to remain largely stagnant or dip slightly by 1% by year’s end.
Cameron Forbes, general manager of REMAX Realtron Realty Inc., expressed scepticism that Toronto will overtake Vancouver. He cited Vancouver’s limited land availability, bordered by the ocean, mountains, and the Fraser River, as a factor keeping prices high. “Vancouver is more restrained,” Forbes said, predicting it will remain the most expensive housing market in Canada for the foreseeable future.
Policy changes boost buyer confidence
Federal policy changes implemented in December 2024 are expected to stimulate demand. These include an increased price cap for insured mortgages, rising from $1 million to $1.5 million, and allowing first-time buyers to access 30-year mortgage amortizations.
Forbes believes lower interest rates in 2025 will also encourage activity among first-time buyers and investors. “As rates come down, there will be opportunities for investors to come back into the market,” he said.
Condo market recovery to take time
Both Soper and Forbes agree that the condo market will recover more slowly than other housing segments. High levels of supply, including newly constructed units, are keeping prices steady. Soper expects condo transactions to pick up closer to the traditional spring buying season or later.
Sellers should also prepare for a longer wait to close deals. “It takes time in normal economic times to sell a big asset like a home,” Soper said, urging patience for those listing properties in the new year.
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