Greater Toronto Area (GTA) homes are expected to grow even pricier in 2025 as experts predict competition will only increase following a massive Bank of Canada rate cut this past fall.
Royal LePage released its 2025 Market Survey Forecast on Thursday morning, which delves into the future of major housing markets across Canada, including the incredibly competitive GTA market.
After a year of nominal price increases hampered by interest rates, the end of 2024 has brought on a surge of buying activity, one that experts predict will fuel further price appreciation for homes in the new year.
“After several years of unusual volatility in the real estate market, key indicators point to a return to stability in 2025,” said Phil Soper, president and chief executive officer of Royal LePage, adding that “The backlog of willing and able buyers continues to grow, and upcoming changes to mortgage lending rules will further enhance Canadians’ borrowing power.”
“Most notably, the Bank of Canada’s shift from ‘inflation fighter’ to ‘economy booster’ has taken time to influence buyer behaviour,” said Soper.
“We saw a marked increase in market activity at the start of the fourth quarter, following the Bank of Canada’s 50-basis-point rate cut. Buyers now believe home prices have hit bottom and are eager to act before competition intensifies.”
Royal LePage predicts that by the fourth quarter of 2025, GTA aggregate home prices will increase by an even 5 per cent, costing an average of $1,225,770.
When broken down by housing type, it becomes clear that the majority of this demand is in the single-family detached segment, where home prices are expected to surge by 7 per cent and cost a median of $1,523,466 by late 2025.
The stagnating condo market is one area where experts predict prices will actually decrease in 2025, projecting a modest one per cent decline to a new median price of $714,285 by Q4 2025.
“When the Bank of Canada first began making cuts to interest rates midway through the year, sidelined buyers in the GTA seemed resolute in their commitment to hold out for prices to reach their floor, said Shawn Zigelstein, sales representative and leader of Team Zold, Royal LePage Your Community Realty.
“Following the supersized rate cut made in October, the tide began to turn and activity picked up materially. This momentum is expected to persist through the winter months, giving way to an early spring market in 2025,” continued Zigelstein.
“While this boost in activity has not translated into an increase in prices just yet, inventory that had been building up over the past several months is now being quickly absorbed,” he added.
“Another significant batch of supply is unlikely to come online before spring, meaning buyers reentering the market will start to feel competition heat up and see some upward pressure on prices.”
On the national level, Royal LePage is forecasting the aggregate price of a home in Canada will increase overall a bit faster than the GTA’s rate, expected to grow 6 per cent year-over-year in the fourth quarter of 2025.
In contrast, the Toronto Regional Real Estate Board (TRREB) reported on Wednesday that the average GTA selling price increased 2.6 per cent year-over-year between November 2023 and November 2024, sitting at $1,106,050.
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