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BMO’s latest housing outlook for 2025 is a must-read if you’re watching the real estate market closely. Their insights echo a lot of what we’ve been saying about Toronto real estate, but they also bring some sharp new angles to the table.
From the diverging paths of houses and condos to the long road to recovery, there’s plenty to unpack, especially if you’re trying to make smart moves in today’s market. Let’s break it down.
Canadian Real Estate Is not All The Same
Let’s start with this: not all Canadian real estate markets are created equal.
Toronto’s market took a big hit, but that might actually set us up for a stronger recovery compared to other regions. That said, it’s crucial to understand that houses and condos here are heading in completely different directions.
Next, Toronto’s housing market isn’t moving in one direction. Houses and condos are on very different paths. Detached homes are holding up well, thanks to steady demand from young families, keeping prices firm. On the flip side, condos are facing headwinds—a surge in new builds and investor-owned units hitting the market is keeping supply high and growth low.
For investors, condos just aren’t cutting it right now. Compare today’s risk-free GIC rates (hovering around 4%) to condo cap rates (3–3.5%), and the math doesn’t look great. Add falling rents (thanks to slowing population growth and more supply), and condos feel like a tough sell—at least until valuations improve.

Where Are Mortgage Rates Headed?
Right now, fixed mortgage rates are hovering in the low-to-mid 4% range, and variable rates are around 4.7%. Good news: they’re expected to drop closer to 4% soon. Plus, the government has rolled out new rules:
- Higher price caps for insured mortgages: Now up to $1.5M, meaning smaller down payments on more expensive homes.
- 30-year amortizations: Available to first-time buyers and new builds, giving buyers more breathing room.
These changes could nudge prices slightly upward, but let’s be real—don’t expect a massive spike. It’s more about keeping the market stable than fuelling another boom.


The Value-Add Opportunity
What BMO didn’t touch on, but we think is huge, is the shift toward value-add projects.
With construction costs easing, borrowing rates falling, and new government incentives (like more units per lot and waived development charges), these projects are becoming a no-brainer. Plus, the government is rolling out construction financing programs to make it easier to get started.
Value-add strategies might feel like a more conservative play, but they offer faster, higher, and more predictable returns—especially in a market like this.



The Long Road to Recovery
The biggest takeaway from BMO’s article? The market might be stabilizing, but we’re still a long way from the peaks of 2022. BMO estimates we’re about halfway through this correction, and it might take until 2029 for prices to climb back to those highs.
Why so long? After the pandemic, we had a perfect storm: millennials flooding the market, record immigration, and rock-bottom rates. But now those factors are fading, so the recovery will take time.
The silver lining? This correction shouldn’t be as drawn out as the 1990s crash, thanks to interest rates that aren’t staying sky-high for years.
How We Can Help
So, what does this all mean? Toronto’s market has recovery potential for 2025, but it’s going to take a strategic mindset to make the most of it. If you’re looking for stronger cash flows, it’s time to move away from condos and into the multiplex space. Play the long game, focus on cash flow, and lean into value-add projects for better returns.
At Elevate Realty, we’re here to help. Our team of seasoned investors specializes in multiplexes and value-add projects in Toronto, and we’ve got the experience to guide you every step of the way. From finding the right investment to helping with renovations, property management, and everything in between, we’ve got you covered.
If you’re ready to dive into the world of Toronto multiplexes, let’s chat!
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!