Condos & Homes Hub Blog - Navigating the Toronto Condo Market: A Look at 2025 Trends

The question on the minds of many prospective buyers and sellers is: Will condo prices go up in Toronto in 2025? The answer, according to recent market data, is complex, but current indicators suggest a gradual path toward stabilization rather than a dramatic surge. While the first quarter of the year saw price declines and a cooling market, expert analysis points to a future where renewed demand and improving affordability could influence a more positive trajectory for condo values.

The Current State of Toronto's Condo Market

The start of 2025 has been marked by a significant rebalancing of the Toronto-area housing market. The 2025 Q1 Condo Market Report from the Toronto Regional Real Estate Board (TRREB) highlights a period of increased choice for buyers. This is evidenced by a substantial increase in new listings—up 25.2% year-over-year—and a simultaneous drop in sales, which were down 21.7% in the same period. 

This shift from a seller's market to a more balanced one has given buyers greater negotiating power, leading to a dip in the average selling price. For the Greater Toronto Area (GTA), the average condo selling price in Q1 2025 was $680,146, representing a 2.2% decrease from the first quarter of 2024. In the City of Toronto itself, the average price similarly saw a slight decrease, settling at $711,185 in Q1 2025, down from $723,107 a year earlier.

The following chart data from the TRREB report illustrates the key metrics from Q1 2024 to Q1 2025, showing the shift in the market:

Factors Driving the Price Correction

This price correction is a direct result of several key factors. Affordability, while still a major obstacle, has shown signs of improvement. The Housing Trends and Affordability report from RBC Economics notes that owning a home in Canada is the most affordable it has been in three years, with interest rate cuts driving homeownership costs lower. 

Toronto, specifically, "recorded the largest decreases in Q1" for ownership costs. This easing of affordability stress has been particularly beneficial for condo buyers, with the condo affordability measure in Toronto "effectively back to where it was before the pandemic". The report attributes this to moderate price declines that have "significantly amplified the generally positive effect of lower interest rates".

However, the current market softness isn't solely a result of price corrections. Consumer confidence has been temporarily dampened by economic uncertainty, particularly surrounding Canada's trade relationship with the United States. This has caused a temporary pause in recovery, driving sales to "decades' lows outside the pandemic lockdown period" in the Toronto area. Even with declining prices and improving affordability, many potential buyers are hesitant to make a move in such an uncertain climate. The abundance of available inventory, especially for condos, has also intensified competition among sellers.

Looking Ahead: A Path to Recovery

Despite the recent downward pressure, the outlook for the second half of 2025 appears more optimistic. The TRREB report suggests that as economic confidence improves in the coming months, "the demand for condominium apartments should increase as well". The expectation of "further rate cuts in 2025" is a crucial component of this forecast, as lower borrowing costs are expected to entice would-be homebuyers who have been waiting on the sidelines. While a "broad-based rally" is unlikely, a rebuilding of confidence is clearly positive for the market. The RBC report projects "generally stable prices in Canada over the next two years with some local exceptions", suggesting that while we may not see the rapid appreciation of previous years, the market is poised to find a more stable footing.

In summary, the question of Will condo prices go up in Toronto in 2025? does not have a simple yes or no answer. The first part of the year has seen prices soften, driven by increased inventory and cautious buyers. However, the foundational elements for a market recovery are in place: improving affordability due to lower interest rates and a projected increase in economic confidence. As these factors take hold, demand is expected to increase, which could lead to a firming of prices and a more balanced market. The Toronto condo market is in a period of transition, moving from a rapid price growth cycle to a more sustainable, and ultimately more stable, environment.

Your Next Step: The Condos & Homes Hub

Ready to take advantage of the evolving market? Whether you're a first-time buyer, an investor, or looking to sell, the Condos & Homes Hub is your resource for detailed market analysis, new listings, and expert advice to help you navigate Toronto's real estate landscape with confidence.

Frequently Asked Questions

Q1: What are the key factors influencing Toronto condo prices right now?

Key factors include increased listings and sales activity, improving affordability driven by interest rate cuts, and temporary economic uncertainty that has dampened consumer confidence.

Q2: Are condos in Toronto more affordable now than they were last year?

Yes, according to a June 2025 report, Toronto saw one of the largest decreases in ownership costs in Q1, and the condo affordability measure is "effectively back to where it was before the pandemic".

Q3: What's the forecast for the rest of 2025?

Analysts expect further interest rate cuts and an improvement in economic confidence to boost demand. While a broad rally is not expected, the market is projected to stabilize, leading to increased activity and potentially firmer prices.