February 10, 2025 | Buying

The latest Market Outlook and Year in Review report from the Toronto Regional Real Estate Board (TRREB) provides valuable insights into what buyers, sellers, and investors can anticipate in the Greater Toronto Area (GTA) housing market this year. With a well-supplied market and stabilizing economic factors, home price growth is projected to align with the rate of inflation, resulting in moderate price increases throughout 2025.

Home Prices & Sales: What’s on the Horizon?

According to TRREB Chief Market Analyst Jason Mercer, a growing number of homebuyers will take advantage of lower borrowing costs as we approach the spring market. This is expected to boost transactions and slightly increase selling prices. However, temporary economic challenges, such as trade disruptions, could affect consumer confidence in the short term.

Here’s what TRREB is forecasting for 2025:

  • 76,000 home sales – a 12.4% increase compared to 2024, driven by lower mortgage rates and improved affordability.
  • An average selling price of $1,147,000 – a 2.6% rise from 2024 across all home types.
  • Stronger price growth for single-family homes in contrast to the well-supplied condo market.

The Importance of Housing Diversity & Supply

TRREB President Elechia Barry-Sproule underscores that increasing housing diversity and supply is crucial for tackling affordability challenges. Promoting the development of “missing middle” housing—such as townhomes, duplexes, and low-rise multi-unit buildings—will yield more attainable options for families and individuals. Furthermore, purpose-built rentals will continue to be vital in ensuring that all residents have access to quality housing options.

The Need for Collaborative Solutions

John DiMichele, TRREB’s CEO, emphasizes the interconnected nature of affordability and infrastructure issues, such as traffic congestion. He points out that high development charges, taxes, and regulatory red tape pose significant barriers to increasing the housing supply. Addressing these concerns through collaboration between policymakers and industry leaders will be essential for supporting the GTA’s expanding communities.

Market Performance: A Strong Start to 2025

January 2025 began with GTA REALTORS® reporting 3,847 home sales through TRREB’s MLS® System, a 7.9% decline from January 2024. However, new listings surged by 48.6% year over year, reaching 12,392. On a seasonally adjusted basis, January sales improved compared to December 2024, indicating a positive trend heading into the spring market.

  • The MLS® Home Price Index Composite benchmark rose 0.44% year-over-year in January 2025.
  • The average selling price reached $1,040,994, reflecting a 1.5% increase from January 2024.

What This Means for Buyers & Sellers

With more inventory available and mortgage rates becoming more favourable, 2025 presents new opportunities for buyers looking to enter the market and for sellers aiming to benefit from moderate price gains. While economic uncertainties persist, the long-term outlook for the GTA housing market remains strong, bolstered by population growth and demand for diverse housing options.

 

Are you thinking of buying or selling this year? Let’s connect to discuss your real estate goals and how to navigate the evolving market landscape!