2025 is well underway! Typically when the year starts, people are already planning for the year ahead and wondering what's in store. An old saying my mom used to tell me is "Man plans and God laughs"...so true! The Future is hard to predict and when it comes to real estate its not any easier. I've put together a list of my Top ten bold predictions for the real estate market...
Moderate Price Growth: Average property prices in Toronto are anticipated to rise by approximately 5%, slightly below the historical average of 6.7% annual growth.
Stabilized Sales Volume: After subdued activity in previous years, sales volumes are projected to return to or exceed the 10-year average, indicating a healthier and more dynamic market.
Balanced Market Conditions: The market is expected to achieve a balanced state, characterized by 3–6 months of inventory, offering a more predictable environment for buyers and sellers.
Condo Market Stability: With over 40,000 new units slated for delivery, the condo market will experience high inventory levels, leading to relatively stable prices with fluctuations within a modest ±2% range.
Increased Demand for Semi-Detached Homes: Semi-detached homes, priced within reach of the new insured mortgage cap of $1.5 million, will see intense competition and higher sale-to-list price ratios.
Rental Market Adjustments: An influx of purpose-built rentals and new condos is expected to lead to a decline in rental prices by 5–8%, benefiting tenants but posing challenges for smaller landlords.
Rise of Purpose-Built Rentals: Purpose-built rentals will gain prominence, offering modern amenities and professional management, and contributing to a more diversified housing stock.
Challenges for Small Condo Units: Units under 500 square feet may struggle due to shifting buyer preferences towards larger, more functional layouts, resulting in decreased demand for smaller units.
Interest Rate Reductions: The Bank of Canada is expected to continue its monetary policy easing, providing relief for variable-rate mortgage holders and improving affordability for new buyers.
Continued Housing Affordability Challenges: Despite anticipated interest rate cuts, Canada's housing affordability crisis is expected to persist due to high home prices, stagnant wages, and increased demand from immigration.
These predictions suggest a year of stability and modest growth for Toronto's real estate market in 2025, with varying dynamics across different property types and market segments.
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