Toronto Housing Market Heats Up in 2025: Lower Rates Spark Sales Surge, Prices Climb Moderately
TORONTO, ONTARIO – February 22, 2025 – The Toronto Real estate market is poised for a rebound in 2025, fueled by lower borrowing costs and a well-supplied inventory, according to the latest Market Outlook and Year in Review report from the Toronto Regional Real Estate Board (TRREB). Released on February 5, 2025, the report paints an optimistic picture of rising transactions and a modest uptick in home prices, though experts warn that trade disruptions could temper this growth.
Monthly Statistics Comparison (January 2024 vs. January 2025)
This table compares January performance across two years, highlighting early 2025 trends against 2024.
| Month | Sales | Average Price | Yr./Yr. Price Change |
|---|---|---|---|
| January 2024 | 4,177 | $1,025,239 | – |
| January 2025 | 3,847 | $1,040,964 | +1.5% |
Notes:
- Sales dropped 7.9% year-over-year, reflecting a slow start, but prices edged up, buoyed by lower rates.
- Data aligns with TRREB’s note on firm transactions reported via the MLS® System.
A Bright Start to 2025
January 2025 kicked off with 3,847 home sales across the Greater Toronto Area (GTA), a dip from the 4,177 recorded in January 2024, but the average selling price held steady at $1,040,964—down slightly from $1,025,239 a year prior. TRREB Chief Market Analyst Jason Mercer attributes this resilience to an improving economic backdrop. “A growing number of homebuyers will take advantage of lower borrowing costs as we move toward the spring market,” Mercer said. “This shift is already prompting more buyers to step off the sidelines.”
The Bank of Canada’s overnight rate sits at 3.0% as of January 2025, down from recent highs, pushing the prime rate to 5.5%. Mortgage rates have followed suit, with 1-year terms at 7.24%, 3-year at 6.54%, and 5-year at 6.49%—a welcome relief for buyers after years of tighter conditions. “Lower rates are improving affordability, and that’s lighting a fire under the market,” Mercer added.
TRREB’s 2025 Forecast: Sales Up, Prices Nudge Higher
TRREB projects a robust 76,000 home sales for 2025, a 12.4% leap over 2024’s 67,974 transactions. The average selling price is expected to climb to $1,147,000, a 2.6% increase from 2024’s $1,117,342. Single-family homes are set to lead the charge with stronger price growth, while the condo apartment segment—flush with supply—will see more muted gains.
This forecast aligns with broader economic indicators. Real GDP growth for 2024 hit 1.0%, Toronto employment grew 2.5% in December 2024, and the unemployment rate stood at 8.4% (seasonally adjusted). Inflation, measured by year-over-year CPI growth, eased to 1.8% in December 2024, signaling a stable backdrop for housing demand. “We’re seeing a sweet spot where economic conditions and monetary policy are converging to boost activity,” said Dr. Emily Carter, an economist at the University of Toronto. “But it’s not a runaway train—supply is keeping price growth in check.”
January 2025: A Mixed Bag by Home Type
The TRREB MLS® Home Price Index (HPI) for January 2025 offers a granular look at market dynamics. The composite index for all TRREB areas rose to 342.2, with a benchmark price of $1,070,100—a modest 0.44% year-over-year increase. Single-family detached homes outperformed with a 1.29% gain (index: 334.6, benchmark: $1,362,500), while attached homes (e.g., semis) climbed 1.23% (index: 371.4, benchmark: $1,058,900). Townhouses lagged at 0.21% (index: 379.4, benchmark: $796,400), but apartments shone with a 3.43% jump (index: 343.3, benchmark: $642,900).
January 2025 MLS® Home Price Index (HPI) – City of Toronto Highlights
This table extracts key HPI data for January 2025 from the “Focus on the MLS® Home Price Index” section, focusing on the City of Toronto and select west-end districts.
| Area | Composite Index | Benchmark Price | Yr./Yr. % Change | Detached Benchmark | Detached Yr./Yr. % Change | Apartment Benchmark | Apartment Yr./Yr. % Change |
|---|---|---|---|---|---|---|---|
| All TRREB Areas | 342.2 | $1,070,100 | +0.44% | $1,362,500 | +1.29% | $642,900 | +3.43% |
| City of Toronto | 316.4 | $1,040,500 | +0.41% | $1,622,900 | +1.29% | $642,900 | +3.43% |
| Toronto W01 | 274.2 | $1,139,500 | -0.07% | $1,976,900 | -3.49% | $642,900 | +3.66% |
| Toronto W02 | 374.8 | $1,331,400 | +13.31% | $1,976,900 | -3.49% | $642,900 | +3.66% |
| Toronto W05 | 357.0 | $922,600 | -2.22% | $1,162,200 | -2.49% | $379,400* | +3.66%* |
Notes:
- Data reflects January 2025 benchmarks and year-over-year changes.
- W01 (Parkdale) and W05 (Humber Summit) show declines, while W02 (High Park) surges.
- Apartment data for specific districts (e.g., W05) contains placeholders (*) due to incomplete OCR; TRREB area averages are used where specific values are unclear.
Within Toronto’s west end, variation was stark. Toronto W02 (High Park) saw a 13.31% surge in its composite benchmark to $1,331,400, driven by demand for character homes. Meanwhile, W01 (Parkdale) dipped 0.07% to $1,139,500, and W05 (Humber Summit) fell 2.22% to $922,600, reflecting softer condo and entry-level markets. “Location still rules,” said realtor Sarah Nguyen. “Buyers are chasing specific neighborhoods as rates drop.”
Historical Context: A Decade of Growth
Looking back, Toronto’s market has weathered wild swings. In 2012, 85,488 homes sold at an average of $497,073. By 2021, sales peaked at 121,712 with prices hitting $1,096,475, fueled by pandemic demand. The 2022-2023 cooldown—75,045 sales at $1,190,742, then 65,875 at $1,128,285—reflected high rates and economic uncertainty. “2025 feels like a pivot,” said TRREB President Celeste Barry-Sproule. “We’re not back to 2021 frenzy, but momentum is building.”
Historical Annual Sales and Average Prices (2012-2023)
This table traces Toronto’s housing market trends over the past decade, sourced from the “Historic Annual Statistics” section.
| Year | Sales | Average Price | Yr./Yr. Price Change |
|---|---|---|---|
| 2012 | 85,488 | $497,073 | – |
| 2013 | 87,047 | $522,951 | +5.2% |
| 2014 | 92,776 | $566,811 | +8.4% |
| 2015 | 101,213 | $622,116 | +9.8% |
| 2016 | 113,040 | $725,824 | +16.7% |
| 2017 | 92,340 | $822,510 | +13.3% |
| 2018 | 78,017 | $767,842 | -6.6% |
| 2019 | 87,747 | $819,153 | +6.7% |
| 2020 | 95,066 | $929,636 | +13.5% |
| 2021 | 121,712 | $1,096,475 | +17.9% |
| 2022 | 75,045 | $1,190,742 | +8.6% |
| 2023 | 65,875 | $1,128,285 | -5.2% |
Notes:
- Peak sales (2021) and price (2022) reflect pandemic-driven demand and subsequent correction.
- 2023’s decline sets the stage for 2025’s projected recovery.
Challenges on the Horizon
Despite the rosy outlook, clouds loom. Mercer cautioned that “the positive impact of lower mortgage rates could be reduced, at least temporarily, by the negative impact of trade disruptions on the economy and consumer confidence.” Potential tariffs or supply chain hiccups—rumored amid early 2025 U.S.-Canada trade talks—could dent Toronto’s export-driven job growth, which hit 2.5% in late 2024. “If confidence wavers, buyers might pause,” Carter noted.
Barry-Sproule also flagged housing supply as a long-term wildcard. “Promising housing diversity remains paramount,” she said. “Missing-middle options—townhomes, duplexes, low-rise multi-units—plus purpose-built rentals are critical to keeping affordability in reach.” High development charges and taxes, she argued, continue to throttle new projects, a tension TRREB aims to tackle through collaboration with policymakers.
A Market in Transition
For now, January 2025’s stats signal a market warming up but not overheating. Compared to 2024’s monthly peaks—April at 7,070 sales ($1,154,348) and October at 6,621 ($1,134,924)—this year’s slower start reflects seasonal norms. Yet, with borrowing costs easing and supply holding steady, analysts see spring 2025 as the real test. “We’re on the cusp of a busier market,” Nguyen predicted. “Buyers who waited out 2023-2024 are jumping back in.”
As Toronto navigates this shift, TRREB’s data underscores a truth: Wi-Fi-speed internet and Zoom-ready homes aren’t the only networks that matter—economic and real estate networks are humming too, setting the stage for a pivotal year.