The Toronto housing market has always been a hot topic in Canada, from detached homes and condos to the endless debates about interest rates and affordability. But where are we really headed in the next 12–24 months?

In a recent Make Money Count podcast, Marcus and Justin unpacked the current state of the market, why prices may not bounce back just yet, and what challenges (and opportunities) lie ahead for homeowners and investors.

Are Real Estate Prices Going Up or Down?

At the start of 2024, many predicted Toronto home prices could jump another 20%. But the reality looks different today.

• Detached homes: Likely to level out.
• Condos: Expected to stay flat or dip further due to oversupply.
• Growth outlook: Any real recovery may take 12+ months.

Why the cautious outlook? Interest rates are still high, consumer confidence is shaky, and supply is growing faster than demand.

The Interest Rate Factor

Yes, rates are easing — but not fast enough to fuel a sharp rebound.

• The prime rate could drop from 4.7% to around 3.7–3.95% within 12 months.
• Lower rates usually stimulate demand, but right now, fear outweighs optimism.
• Until confidence returns, buyers are staying on the sidelines.

The Condo Glut: Too Much Supply

Toronto currently faces a seven-month supply of condos on the market. With new builds still being completed, inventory is piling up.

At the same time, mortgage arrears and delinquencies are climbing — even among Canada’s biggest banks. For private lenders and small investors who backed risky mortgages, this signals more distressed properties and forced sales ahead.

Defaults, Supply, and “Stinking Thinking”

History shows that when rates drop, defaults tend to rise as struggling borrowers hit a breaking point. That means more supply enters the market right when demand is still weak.

Layer on broader concerns — low productivity, weak GDP per capita, trade uncertainty — and it’s no surprise Canadians are stuck in what Marcus calls “stinking thinking.”

Long-Term Optimism (But a Bumpy Road Ahead)

Here’s the bottom line:

• Short term (12 months): Expect more pain, especially in the condo market.
• Medium term (2–3 years): Prices will likely be higher than today.
• Key driver: Canada still has resources, population growth, and long-term demand.

For now, though, Toronto housing is in for a reality check before the next upswing.

Final Thoughts

The Canadian housing market has always been resilient, but resilience doesn’t mean smooth sailing. With oversupply, rising defaults, and fragile confidence, the next year could be bumpy.

If you’re a homeowner, investor, or simply trying to make sense of your options in this shifting market, now’s the time to get expert guidance.

Talk to the Cannect team today — we’ll help you navigate your mortgage, investment, or refinancing strategy with clarity and confidence.

📞 Call us at 416-766-9000