If you’re waiting for Toronto real estate prices to drop even more because rates are going up, don’t hold your breath. The big banks don’t agree with you. RBC, TD and BMO have all weighed in, and none of them see a big drop in Toronto property prices next year.
We get it. If you’ve ever asked a realtor when to buy, the answer is always now. Spring, fall, rates up, rates down… it’s always now. We’re not going to tell you that. Instead, we’ll walk through what the banks are actually saying, including the parts that don’t help us, and show you how we’re approaching the Toronto market right now.
What the Big Banks Expect for Bank of Canada Rates
Right now, the bond market is pricing in about 1% of Bank of Canada rate hikes over the next year. That’s 100 basis points. But the big banks don’t fully agree with that.
RBC expects the Bank of Canada to start raising rates next year. TD thinks the Bank will hold steady through 2027. BMO is also calling for a hold, and says the market is being too aggressive with its hike forecast.
| Bank | Bank of Canada Rate View | Toronto / Ontario Price View |
|---|---|---|
| RBC | Hikes starting next year | Early signs of stabilizing |
| TD | Hold through 2027 | Stabilize in 2027, gains under 1% |
| BMO | Hold, market pricing too aggressive | Holding flat |
Where all three agree is this… the relief from falling rates is over. If you’re waiting for cheaper mortgages to bring Toronto prices down, that’s not in the cards right now.
Why Toronto Real Estate Prices Aren’t Dropping
Toronto prices fell hard after the 2022 peak, and they’ve been slowly grinding lower since. On paper, the average price is down about 5% from a year ago. That’s the headline most people see.
But here’s what the headline misses. That 5% only compares this September to last September. Most of that drop happened at the end of 2025. Since then, Toronto prices have barely moved in nine months. They bumped up in the spring and slid right back down over the summer.
BMO described the market clearly… speculation is gone, investors are absent, and prices are holding flat. Fewer people are listing, fewer investors are buying, and the people who are left are mostly buying or selling because they need to. That’s a stuck market, not a falling one.
Condos vs Multiplexes: Not All of Toronto Is Moving the Same Way
When people talk about Toronto prices, they usually mean the whole market. But different types of homes are moving in very different ways right now.
Small condos are still flooded with supply. A lot of investor-owned units have finished construction at the same time, and there aren’t enough buyers to absorb them. That keeps pressure on condo prices.
Larger ground-oriented homes are a different story. Houses, semis and Toronto multiplexes are seeing a much more balanced market. So if a bigger price drop does come, it’s far more likely to show up in condos than in the properties multiplex investors buy.
Could Toronto Prices Still Fall? The Math Behind a 5% Drop
If rates had stayed put, there was a better chance prices would slowly recover alongside incomes. But fixed rates moved up from about 4% to 4.5%. That’s roughly a 5% jump in your mortgage payment, or about $200 more a month on an $800,000 mortgage. To make up for that, prices would need to drop about another 5%, or incomes would need to rise by about the same.
So could prices fall? It’s possible. Wages are going up, but slowly. In August, wages were only up 2% from a year ago, the slowest pace in almost nine years. At that pace, incomes won’t close a 5% gap anytime soon.
But that doesn’t mean a crash either. Buyers are being more careful and leaving more buffer, so they won’t overpay. Most sellers aren’t being forced to sell, so they won’t give it away. When both sides dig in, you usually get a long stretch of flat prices. That’s why the banks expect Toronto prices to stay fairly flat over the next year.
How We’re Buying Toronto Investment Properties Right Now
Here’s the thing about a 5% move. You already see swings like that in the Toronto market month to month. So instead of hoping for another 5% drop, we’re doing what we can control… we’re negotiating hard. In today’s buyers’ market, a bigger than 5% difference is something we can find deal to deal, with the right seller. Push on price, ask for better conditions, and ask for a closing date that works for you. You don’t have to wait for the market to give you a discount.
We also run the numbers like rates won’t help us. Every deal we look at gets tested at the higher fixed rate, even if you’re going with a lower variable rate. We also leave a buffer on cash flow, so a few surprises don’t sink the property.
If you’re planning a value-add project to boost the property’s value and refinance, the bar is even higher. After the refinance, you’ll carry a bigger mortgage, and the property still needs to cash flow on it. When it does, the property carries itself, you can recycle your money into the next deal, and you keep getting the value lift and the cash flow without waiting for the Toronto market to recover. You can test this on any deal with our total return calculator.
Don’t Wait for the Market, Make the Numbers Work
We’re not saying Toronto prices have bottomed. Nobody knows that for sure. But you don’t need them to. If a Toronto multiplex works at today’s rates, with a buffer built in, you’re fine whether prices stay flat, dip a little, or start to recover.
The hard part is finding those deals and knowing your numbers are right before you commit. That’s where working with a team that invests in Toronto multiplexes ourselves makes a real difference.
Our brokerage specializes in Toronto multiplexes. We’ll help you find deals, crunch the numbers, and guide you through renovations and management. If you want full support in Toronto multiplex investing, our team can help you:- Find high-potential properties
- Crunch the numbers so you know exactly where you stand
- Coach you through renovations to maximize returns
- Lock in great tenants
- Provide full property management so your investment runs smoothly
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!
This is for educational purposes only; it does not guarantee future performance or serve as financial or tax advice.
