Canada's two priciest markets are a study in contrasts at present
As 2025 progresses, Canada’s largest housing markets—Toronto and Vancouver—are showing contrasting patterns.
While the Greater Toronto Area (GTA) faces continued weakness, particularly in the condominium sector, the Greater Vancouver Area (GVA) has remained more stable despite similar economic challenges, according to economist Rishi Sondhi of TD Economics.
The GTA’s condo market, marked by an oversupply of units and weaker investor demand, has experienced over a year of falling prices.
Sondhi notes that this trend is expected to persist into early 2025, with slow rent growth and a downgraded population forecast contributing to the outlook. Detached home prices in the region have also softened, falling 0.5% year over year in the fourth quarter of 2024.
In contrast, Sondhi points out that Vancouver’s housing market has shown more resilience. Home sales in the GVA increased by 21% year over year over the past three months, significantly higher than the GTA’s 8% rise during the same period.
As of January, average and benchmark prices in Vancouver declined by 6% and 4%, respectively, from their pandemic peaks. Meanwhile, the GTA recorded sharper declines of approximately 15% in both metrics.
Affordability and policy interventions
Differences in affordability and policy measures have contributed to the diverging market conditions.
According to Sondhi, affordability deteriorated less in Vancouver during the pandemic compared to Toronto, making it less vulnerable to rising interest rates.
British Columbia’s provincial government introduced several cooling measures in 2018 and 2019, including increasing the foreign buyer tax rate and raising land transfer taxes. As a result, home prices in Vancouver were already declining by late 2019. In contrast, Toronto’s market saw an 8% year-over-year price increase during the same period, setting a higher baseline for future growth.
Investment activity also appears stronger in Vancouver. Statistics Canada data indicates that about 60% of investment properties built in Ontario and British Columbia from 2016 to 2022 were condominiums.
However, condo sales in the GVA increased by 14% year over year in January, while they fell by 12% in the GTA. Sondhi noted that Toronto’s ratio of condo sales to active listings is approximately 60% below the long-term average, suggesting a greater imbalance between supply and demand.
Both regions face economic uncertainty and rising property listings, which are contributing to weak price growth despite lower interest rates and pent-up demand. However, Sondhi said that Vancouver’s better affordability conditions and ongoing housing construction could position it more securely than Toronto in the months ahead.
Do you believe Vancouver’s housing market will maintain its advantage over Toronto? Share your thoughts in the comments.
