The Toronto housing market has always been a hot topic — and lately, it’s heating up for the wrong reasons. With active listings soaring and buyer confidence at record lows, many Torontonians wonder: Is now the time to buy? Will prices drop further? And is there even a floor to this market anymore?
At Cannect, we’ve been deep in the data and real conversations with our clients. Here’s what we’re seeing — and what it could mean for the near future.
Inventory Is at a Decade-High — And That’s a Problem
According to housing analyst Axel Lands’ recent research, the Toronto real estate market is dealing with a massive oversupply of listings. While the 10-year average for active inventory is around 15,000 units, the market currently has double that — 30,000+ active listings.
And while April is typically a strong sales month for housing in the GTA, this year painted a different picture. Sales activity is at its lowest April level since 1995, excluding the pandemic. Meanwhile, new listings are still coming in at historical averages, meaning more supply with very little demand to meet it.
Buyers Are Sitting on the Sidelines — and It’s Easy to See Why
Despite the Bank of Canada signaling future interest rate drops, consumer confidence hasn’t followed. Inflation, especially around food prices, remains sticky, and economic uncertainty around tariffs, job losses, and business investment continues to weigh on people’s decisions.
The reality is, to revive this market, a few things need to happen:
- More rate cuts from the Bank of Canada (which we expect to see through the rest of 2025)
- Clarity on trade and tariffs
- A boost in employment and business investment
- And most importantly, renewed consumer confidence
Without these, buyers will continue to wait it out, hoping prices fall further.
Are Condo Prices Reaching the Bottom?
Here’s something that might surprise you: condos are now selling for less than the cost to build them.
That’s right — in many cases, the resale value is below construction cost, especially for micro-units (think: 300–400 sq ft), which were largely scooped up by investors. These small condos, once seen as easy investment plays, are now struggling to attract renters and buyers alike.
And with thousands more similar units expected to come online by 2026, downward pressure on both prices and rents is likely to continue.
The Immigration Factor — What Happens When You Turn Off the Tap?
Immigration has long been a key driver of housing demand in Canada. But with recent federal policies aiming to curb immigration, the demand cushion is disappearing, just as more supply floods the market.
This perfect storm is making it harder for owners to sell, especially at a profit. And in some cases, we’re seeing:
- Buyers walking away from deposits
- Appraised values coming in below the purchase price
- Developers suing buyers to recover losses
- Widespread use of blanket appraisals to prop up valuation
Is There a Floor in the Toronto Housing Market?
This is the question we keep getting asked. But the honest answer? Maybe not yet.
Historically, real estate markets have a floor — the price below which sellers simply won’t go. But when units are reselling for less than it cost to build them, we may not have found that floor yet.
We’re not saying a crash is imminent. But we are saying this: don’t expect a quick rebound. We need more than a rate cut or two to fix the imbalances in today’s housing market.
What Should You Do if You’re Thinking About Buying?
It depends. If you’re an investor looking to flip a condo in 12 months? Now’s probably not your time. But if you’re buying a home to live in long-term, and you find the right deal in a market that favors buyers, this could be your opportunity. As always, we’re here to help you navigate these choices — whether you’re a buyer, seller, or investor.
Let’s Talk About Your Next Move
At Cannect, we give you honest guidance, not sales pitches. If you’re worried about where the market is headed or looking for ways to make your money work harder through real estate investing, we’re here to help.
