Toronto Condo Market Outlook: What to Expect for the Rest of 2024 and Into 2025

As we move through the final quarter of 2024, the Toronto condo market continues to face some unique challenges. If you’ve been keeping an eye on the market, you’ll have noticed price fluctuations, shifting inventory levels, and changing buyer behavior over the past couple of years. So, what’s next for the rest of 2024, and what can we expect in 2025? Here’s a breakdown of the trends and projections that can help you plan ahead.

1. What’s Happening Right Now?

In recent months, we’ve seen condo prices drop significantly—down 14% since March 2022. The average condo price in September 2024 was $707,000, which, while up from the August average of $681,000, doesn’t signal a major recovery. This slight rise is typical for the time of year, as September tends to see a bump following the summer slowdown. However, we’re not out of the woods just yet.

Sales volume has also been sluggish. Fewer than 1,000 condos were sold in August 2024, a big drop from the more active market we saw in 2022. The number of unsold units has increased, pushing inventory levels to 7 months’ worth by September 2024. This oversupply is keeping prices from rising, and sellers are feeling the pressure to lower their prices to attract buyers.

2. What’s Driving the Market?

There are two major forces at play: rising interest rates and an oversupply of inventory. Higher interest rates make it more expensive for buyers to secure mortgages, which has slowed down demand. At the same time, too many condos on the market mean sellers are competing harder for the fewer buyers who are active. This combination is why prices have remained low.

For the rest of 2024, we can expect prices to decline slightly, although no drastic drops are likely. Many sellers will probably pull their listings off the market before year-end if they haven’t sold, reducing some of the excess inventory. But this won’t be enough to dramatically shift the market before the new year.

3. What to Expect in 2025

Looking ahead to 2025, several factors could bring some positive changes to the market. New mortgage rules, including the introduction of a 30-year amortization period for first-time buyers, could help stimulate demand by making homeownership more affordable. Lower interest rates are also on the horizon, which should make borrowing cheaper and possibly encourage more transactions.

However, it’s unlikely we’ll see significant price increases until the latter half of 2025. With inventory levels still high, the market needs time to absorb the excess supply before we see any upward pressure on prices. Expect a slow but steady recovery, with a focus on long-term growth rather than a quick rebound.

4. What This Means for Buyers and Sellers

If you’re a buyer, this could be a great time to find a deal, especially if you plan to hold onto the property for the long term. The current market conditions favor buyers, with plenty of inventory to choose from and prices still relatively low. Just be sure to focus on finding the right property that meets your needs for the next few years, as prices aren’t expected to rise quickly.

For sellers, patience is key. If you’re looking to sell in 2024, be prepared for a longer listing period and the possibility of accepting a lower offer to close the deal. If you can afford to wait until 2025, you may benefit from a slightly stronger market once the new mortgage rules and lower interest rates take effect.

Final Thoughts

The Toronto condo market is expected to remain somewhat subdued through the end of 2024, with prices continuing to face downward pressure. However, there’s light at the end of the tunnel, with 2025 offering potential relief for both buyers and sellers. Lower interest rates and new mortgage policies should help bring more buyers into the market, leading to gradual price increases later in the year. For now, whether you’re buying or selling, it’s important to stay informed and plan with a long-term perspective in mind.