This is for educational purposes only; it does not guarantee future performance or serve as financial or tax advice.
As we close out 2024, it’s time to reflect on how the Toronto real estate market performed and what lies ahead in 2025.
With interest rates dropping, new government, and evolving market dynamics, there’s a lot for real estate investors to consider. Let’s break it all down.
2024: A Transition Year in Toronto Real Estate
The first half of 2024 was marked by uncertainty, especially around interest rates. Fixed rates fluctuated, leaving many unsure about the market’s direction.
However, by the end of the year, it became clear that 2024 was a transition period. Interest rates began to drop faster than anticipated, setting the stage for a more stable 2025.
2024 Market Highlights
Sales Activity Picks Up
The sales-to-new-listings ratio saw an uptick late in the year, signalling renewed buyer interest. This reflects a more balanced market, especially as sellers began re-entering after sitting on the sidelines during rate hikes.
Single-Family Homes Lead the Recovery
Starter homes, particularly semi-detached properties, gained traction. These homes are often the first to bounce back, thanks to their affordability and potential for solid cash flow. Semis offer a unique opportunity—they’re typically priced lower than detached homes but can generate comparable rental income and value-add potential.
Condos Remain Weak
While single-family homes are recovering, the condo market struggled. Prices fell due to oversupply and weak investor interest, a trend likely to continue into 2025 as more pre-construction units hit the market.
Looking Ahead to 2025: Key Trends to Watch
Falling Interest Rates Bring Stability
Canadian banks predict interest rates will drop by 50-100 basis points by mid-2025. This is good news for buyers and homeowners, especially those renewing mortgages initially locked in at lower rates. Lower borrowing costs will also help stabilize cash flow for investors.
Shift Towards Value-Add Opportunities
With more focus on rental income and long-term stability, value-add projects will likely take centre stage. Properties with potential for renovations or conversions into multiplexes are expected to draw more attention from investors.
New Government, New Policies
A potential Conservative government could bring impactful changes. Promises to reduce development charges, speed up housing approvals, and cancel the planned capital gains tax increase would benefit real estate investors and developers alike.
Easing Immigration Pressures
With immigration rates normalizing, the pressure on infrastructure and housing costs will ease, which could temper rent increases. While this might challenge landlords, falling interest rates should help balance cash flow for new and existing investors.
Opportunities for 2025 Investors
If you’re considering diving into Toronto real estate in 2025, here’s where to focus:
- Starter Semis and Multiplexes: Semi-detached homes and smaller multiplex properties are ideal for investors looking to generate cash flow and add value.
- Value-Add Projects: Renovations and unit conversions can offer strong returns in a market shifting towards rental income stability.
- Government-Backed Financing: New programs targeting smaller multiplex developments could make these projects more accessible to mom-and-pop investors.
How We Can Help
At Elevate Realty, we’re not just a sales brokerage—we’re experienced investors with a deep understanding of Toronto’s complex market. Whether you’re looking for a turnkey property or a value-add project, we’re here to guide you every step of the way.
We’re not just a real estate brokerage—we’re investors who have done this ourselves, and we specialize in Toronto multiplexes.
Here’s what it’s like to start as a client with us:
- Initial Consultation: We’ll talk with you to understand your needs and teach you how to invest wisely in Toronto real estate.
- Market Search & Purchase: We’ll search the market to find the perfect property for you.
- Renovation Support: If the property needs renovations, our trusted contractors are ready to help, and we’ll coach you as you manage the project.
- Leasing and Management: If you need help renting out and managing your property, our leasing and management team is here for you.
Ready to get started? Click on the link below, and let’s start working together!
What Toronto Real Estate Investment Is Right For You?
Check out our complete Toronto real estate investment guide for all the details and real-life examples. If you’re ready to dive in, just book a call with us!
