If you were hoping for a recovery in the GTA condo market this year, you might be disappointed.
A new report by Rishi Sondhi, economist at TD Economics, predicts that resale condo prices in the region will drop another 10% in 2025—continuing a downward trend since their peak in 2023. By the end of the year, prices could be 15 to 20% lower than their Q3 2023 high.
“Demand conditions have deteriorated significantly,” Sondhi explains, leading TD to revise its forecast even lower. Sales are also expected to remain low this year.
Despite the decline, condo prices would still be 5 to 10% higher than pre-pandemic levels after the correction.
Factors impacting the market
Several factors are contributing to the continued decline in condo prices.
Population growth is slowing due to new immigration policies, causing rents to fall and investor interest to wane.
Affordability remains a challenge for first-time buyers, and economic uncertainty is impacting consumer confidence and employment.
Despite a decrease in condo completions, supply remains high, putting pressure on listings.
Potential relief ahead
TD predicts a potential turnaround in 2026, driven by lower interest rates and improved economic conditions.
Pent-up demand, easing trade tensions, and reduced construction starts could help stabilize the market.
Government policies and the market
The federal government’s housing initiatives may eventually benefit the condo sector, but the impact will take time to materialize.
Policies like GST elimination for first-time buyers and reduced development charges could help boost the market.
Outlook for the market
The GTA condo market is expected to face challenges in 2025, with prices declining and sales remaining slow. While there may be some improvements in 2026, any recovery is likely to be gradual.
“The expected recovery in hiring and economic activity will be slow and moderate,” Sondhi warns.
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