Invest In Toronto Real Estate: Mortgage Swings & Market Projections 2024 – 2025!

Lately, fixed mortgage rates have been jumping all over the place, reacting strongly to changes in the economy.

And because Toronto real estate is really affected by interest rates, Toronto’s property market has been extra emotional lately. More people than usual are trying to guess when the best time to buy or sell is.

Find out what’s happening in the Toronto real estate market, what might happen next, and how numbers look if you were to invest in Toronto real estate today!

Toronto Real Estate & Mortgage Trends: Fall 2023 to Winter 2024

At the end of last year 2023, three-year fixed mortgage rates took a sharp dive, dropping by more than 1%. 

We also saw strong activity pickup in January with sales up by 37%, and listings not being able to catch up – only going up by 8%. 

Overall, buyers remain cautious, so Toronto home prices continued falling. 

So for someone looking to invest in Toronto real estate based on numbers, the deals looked even more attractive – lower prices and lower rates made the decision even more clear with even better cash flows.

But things are still uncertain and many buyers and sellers are still unsure about the market because the news keep changing all the time. 

At first, experts were saying that interest rates might come down earlier around the spring. 

But then once data about the economy showed that things were doing better than expected, these expectations got pushed later down to summer, which then pushed fixed rates up a bit again and slowed down buying momentum.




Here’s the thing – even with fixed rates edging up higher again, they’re still lower than they were in October. Plus, housing prices have gone down, so cash flows still look better than before. 

Most recently, inflation numbers for January came out, throwing us all for another ride because they were lower than expected, mainly because food and energy prices went down. 

If you don’t count mortgage costs, inflation is at just 2%, which is where Bank of Canada wants it to be.

2024-2025 Real Estate Predictions: Insights from CREA & RBC

After this, bond yields are already going down, which means fixed rates will probably follow. And this time, because buying momentum has already been building up from January. 

Now, we’re getting more confidence with CREA and RBC saying that Canada’s housing correction has likely run its course, it looks like there might be more buying activity gearing up for spring.

Toronto Real Estate Investing: Is Now the Right Time to Buy?

Do it make sense to invest in Toronto real estate today? Let’s break it down. 

When someone wants to buy a home, they face a few hurdles:

  • The downpayment requirement
  • Qualifying for a mortgage
  • The ability to pay for the monthly payments afterwards

With interest rates shooting up, it hasn’t become harder to qualify because prices have dropped by 25%, and monthly payments are more or less the same due to the lower prices.

The big change for the better is that you now need 25% less money for a downpayment to buy a house.

For example, instead of needing $300,000 to buy a $1.3 million starter home in Toronto in 2022, now you only need closer to $230,000. It’s still a lot of money, but it’s easier than before to invest in Toronto real estate. From an investor’s point of view, buying today makes a lot of sense from a cash flow and recovery standpoint too.

Once things become clearer, we’ll see more end user demand too and both of these will continue to build up momentum for Toronto real estate.

Exploring a Prime Opportunity in Toronto's Property Market

Here’s what a deal looks like these days if you’re looking to invest in Toronto real estate: You can buy a house for $950,000 and divide it into 3 units with around $80,000 in renovations. 

It’s still a project, so the upfront cost is higher at $300,000, but because you’re doing renovations, the property’s value could go up to $1.1 million once it’s all done. That’s a potential value-add gain of $70,000. 

After renovations, you could get over $6,000 in monthly rents. With a fixed rate of 5.4% for 3 years and deducting operating expenses, you could make a very healthy cash flow of $800 a month.

If fixed rates end up drop closer to 5% by closing, your cash flows could improve. 

On the other hand, if the market ends up thinking that lower rates justify a higher value instead, then we could even see a 5% increase in values more quickly. 

Either way, this Toronto real estate investment deal makes a lot of sense!

How We Can Help

If you’re looking to invest in Toronto real estate and want help searching for the best deals on the market, we’re your team! 

We’re not your typical real estate sales brokerage. Instead, we focus on using numbers to make better real estate investing decisions in Toronto. 

That can mean looking for stronger investments with positive cash flow, thinking about risk management, and looking for ways to boost returns like  value-add renovations and gentrifying areas. 

If you want to discuss your private real estate situation with us, just go to this link below to set up a time to chat!

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!