Toronto's condominium market is experiencing a significant reset in early 2025, with falling prices, rising inventory, and shifting dynamics that are reshaping opportunities for all market participants.
Recent data reveals a market in transition, with notable price decreases expected to continue throughout the year and a record number of new units coming online. This comprehensive analysis examines current market conditions and provides actionable insights for sellers, buyers, and investors navigating this evolving landscape.
Current Toronto Condo Market Conditions and Pricing Trends
The Toronto condo market has entered a correction phase that shows no immediate signs of reversing. According to recent research by Bullpen Research & Consulting, the average asking price per square foot for new, unsold condos fell to $1,524 in Q4 2024, representing a 10% decline from the three-year peak of $1,689 reached in Q3 2022.
This downward trend is not merely a temporary fluctuation but appears to be gaining momentum.
The Toronto condo resale market is experiencing similar pressures. Condo sale prices declined 1.6% across the GTA in early 2025—notably, condos were the only housing segment to record a price drop during this period. This divergence from other property types highlights the unique challenges facing the condominium sector in the GTA.
Sluggish Sales Volumes and Low Buyer Activity
Transaction activity has slowed considerably across the condominium landscape.
Data from early 2025 shows condo sales dropped 12.1% year-over-year across the GTA. This decline was more pronounced in Toronto's core (416 area code), where sales fell 14.5%, compared to a more modest 7.4% decrease in the suburban 905 regions.
Despite the overall drop in transactions, there is a projected increase in new condo sales for 2025—from 4,800 units in 2024 to approximately 6,300—primarily attributed to larger project completions scheduled for this year.
This increase in sales volume, however, comes with price concessions as developers adjust to market realities.
Condo Supply Surges and Inventory Builds Up…Quickly!
Perhaps the most significant factor influencing the current market is the unprecedented supply increase. January 2025 revealed what market analysts describe as potentially "the biggest year-over-year jump up in new listings we've ever seen," with condos driving the majority of this increase.
To put this in perspective, the Toronto market started 2024 with approximately 6,300 active condo listings and nearly doubled to 12,000 by year-end.
In contrast, 2025 began with 8,500 active listings and projections suggest this number could reach 15,000 following historic growth patterns.
Pre-Construction Wave Only Adds to the Problem
The supply situation is further complicated by the imminent completion of numerous pre-construction projects. According to Urbanation, approximately 31,000 new condo units are expected to be completed in 2025, significantly increasing available inventory.
Some market analysts project an even higher number, suggesting up to 40,000 new condo unit completions this year.
This completion wave represents a critical challenge for the market, as many of these units were purchased years ago when borrowing costs were substantially lower and market expectations were more optimistic. Ben Myers, founder and president of Bullpen Research & Consulting, identifies a "fundamental issue" for developers in 2025 and 2026, when investors and other condo buyers who purchased at peak prices must close transactions in a markedly different market environment.
Assignment Listings are Increasing and Buyers getting desperate to offload their condos
The assignment market—where buyers of pre-construction units sell their purchase contracts before construction completion, offers a window into current market sentiment.
Listings for assignments in prime downtown Toronto locations like Canada House (with occupancy dates in mid-2025) show asking prices ranging from approximately $520,000 for one-bedroom units to $899,990 for two-bedroom units in desirable locations.
These assignment listings highlight both opportunity and risk. While they provide entry points for buyers seeking newer properties without waiting through construction cycles, they also reflect the challenges facing original purchasers who may be struggling to close on their investments or seeking to exit before completion.
Selling your Toronto Condo? Here’s what you need to know
For existing condo owners contemplating a sale, the current market presents several challenges that require strategic thinking:
Lower your Price Expectations
Sellers must adjust their price expectations to reflect current market realities. Properties priced according to 2022-2023 comparables are likely to sit on the market longer and ultimately sell for less. The data clearly shows a market that has reset to pricing levels reminiscent of 2020-2021.
Competitive pricing strategies have become essential, as the substantial increase in inventory means buyers have more options and leverage in negotiations. Sellers who recognize this shift early and price accordingly will likely achieve better outcomes than those who test the market with aspirational pricing.
Consider Timing
For sellers who have flexibility regarding their timing, the projected continued price decreases throughout 2025 suggest that earlier sales may achieve better results than waiting for market conditions to improve. The supply-demand imbalance appears unlikely to resolve in the near term, with significant additional inventory still entering the market.
Looking to Buy a Toronto Condo? There are (Lots) of Opportunities for Buyers
While challenging for sellers and developers, the current market creates notable opportunities for prospective buyers:
Increased Negotiating Power
With inventory levels at record highs and continuing to climb, buyers have significantly more options than in previous years. This abundance of choice translates directly into negotiating leverage, with price reductions and concessions becoming increasingly common.
Buyers who hesitated during the frenzied market of recent years now find themselves in a position of strength, able to take their time, compare multiple properties, and negotiate favorable terms.
Entry Point for First-Time Buyers
The price corrections in the condo market may create entry opportunities for first-time buyers who were previously priced out of Toronto's real estate market. While affordability remains challenging due to elevated interest rates, the combination of price reductions and potential seller incentives improves the equation for those looking to enter the market.
What’s the outlook for Toronto Condo investors?
For real estate investors, the current market presents both challenges and potential opportunities that require careful assessment:
Cash Flow Considerations
The rental market, while remaining relatively strong, has not kept pace with the rising ownership costs driven by higher interest rates. This divergence creates cash flow challenges for investors purchasing in the current environment, particularly for newly completed units acquired at today's interest rates.
Investors must conduct thorough cash flow analyses that realistically account for all expenses, vacancy periods, and potential rent growth limitations. Positive cash flow investments have become more difficult to identify in the core Toronto market.
Long-Term Value Prospects
While short-term metrics appear challenging, Toronto's fundamentals as a growing, economically diverse city with strong immigration remain intact. Investors with longer time horizons and sufficient financial capacity may find that the current price corrections create favorable entry points for long-term appreciation.
The market reset may ultimately prove beneficial in establishing more sustainable price levels from which future growth can occur, particularly as interest rates eventually moderate and population growth continues to drive housing demand.
Are there brighter days ahead for Toronto condos?
The Toronto condo market appears to be in the midst of a necessary correction after several years of unsustainable growth. The combination of rising interest rates, record supply levels, and investor hesitancy suggests continued price pressure throughout 2025.
Developers are likely to continue adjusting launch strategies, with some potentially delaying new projects until market conditions improve. Ben Myers notes that declining prices make "everyone nervous," affecting lenders, equity partners, and the overall development pipeline.
For those who purchased pre-construction units at peak prices, the closing period in 2025-2026 may prove particularly challenging, potentially requiring creative solutions from developers to facilitate transactions in a changed market environment.
In Conclusion
The Toronto condominium market in 2025 presents a complex landscape with significantly different dynamics than the heated market of recent years. Declining prices, abundant supply, and shifting buyer sentiment create both challenges and opportunities depending on one's position and objectives in the market.
Sellers must adjust expectations and strategies to compete effectively in a buyer's market. Purchasers find themselves with increased options and negotiating power not seen in years. Investors must carefully evaluate cash flow realities while potentially identifying long-term value opportunities as the market resets.
While challenging for many participants, this market correction may ultimately establish a more sustainable foundation for Toronto's condominium sector in the years ahead, recalibrating prices to better align with economic fundamentals and creating more balanced conditions for all stakeholders.
Unlock Your Seamless Closing Experience
Your Journey to a Worry-Free Closing Starts Here!
