Many of us have a love/hate relationship with change. Brace yourself. Among the latest disruptors attempting to flip the residential real estate industry on its head is Hyyve, a soon-to-be-launched Toronto-based platform where Realtors bid on residential listings, competing with other agents in what’s essentially a bidding war to get clients. 

Yes, you read that right. Agents pay upfront for the right to list a property. 

 Sellers keep the cash, regardless of the outcome

What’s more, homeowners get to keep the cash the winning agent bid, even if the property doesn’t sell.

Although bidding for listings won’t be everyone’s cup of tea, “It gives you a direct line to sellers who want to go to market,” points out Toronto boutique brokerage agent Dorian Rodrigues, who recently signed up. “It’s another way to generate business…and will inspire agents to put more resources towards the listing.”

The platform, the first of its kind in Canada, is currently taking agent registrations and is expected to launch in time for the spring market. If all goes well, the plan is to expand across the country. 

Not a brokerage, but a bold industry disruptor

Not to be confused with a brokerage, this is a system designed to disrupt the way sellers choose a Realtor, with an added incentive for them in the form of bid cash from the agent in advance of a sale. For agents, it’s a different twist on lead generation. The expectation is that this seller-friendly approach may appeal most to tech-savvy, cash-pinched younger sellers in their 30s and 40s, who may not have strong established connections with a Realtor. 

Agents must pay a monthly subscription fee to place bids on Hyyve (reportedly a few hundred dollars per month on average).

Weighing the pros and cons

Potential pros and cons are being weighed up by industry experts. Re/Max Canada president Christopher Alexander thinks that the Hyyve platform is likely to be a complement to the industry, providing more choice for sellers. But he adds that the risk that some homeowners on the platform might “prioritize agents based solely on price” rather than on expertise could be problematic.

Patrick Armstrong, who co-founded Hyyve along with fellow entrepreneur Kirstin Thomas, agrees that’s a valid concern. But the platform is designed “to encourage sellers to consider overall value rather than just price,” he insists. 

“Listings are inherently valuable and are something that should be monetized and controlled by the home seller,” Armstrong maintains.

He adds, “We don’t typically label ourselves as industry disrupters.” 

Almost everyone else does though. 

With Hyyve, Armstrong asserts, agents gain access to a wider client base and high conversion listings, while “sellers benefit from upfront cash, better agent competition and increased transparency.”

Transparency is what attracted registrant Leo Naiman, co-owner of a Toronto flat-fee brokerage. “Too many details are unclear in a regular deal,” in his view. “I’m all for any move towards more transparency in the industry.”  

 A draw for sellers and Realtors?

Here’s how the platform works. Sellers upload their property details free of charge. Then agents can submit detailed bids that give a comprehensive description of their credentials, sales plan, and the services they’ll provide—marketing, staging, perks, terms, etc.—along with the commission and bid amount they’re offering to secure the listing. (Agents can’t see each other’s bids.) 

Homeowners choose the best bid for their purposes based on this information. The expectation is that sellers won’t necessarily just go for the agent offering the highest bid and lowest commission, but instead will focus on who’s most likely to move the listing. But that decision is entirely up to the homeowner. Armstrong points out though, that “agents who overbid and under-perform will quickly lose credibility.”

He’s aware that the open bidding process means Realtors “may face stiff competition, especially from well-established agents or large teams with greater resources.” But he believes the Hyyve app can also be a boon for newer agents, allowing them to “stand out by offering creative bids, detailed sales plans and additional services that differentiate them.” 

Hyyve takes a cut 

Once a bid is accepted and certain conditions have been met to ensure that it’s legit, Hyyve takes its full commission of 30 per cent from the winning bid amount. The rest goes to the homeowner. For instance, Armstrong explains, if an agent’s successful bid is $1,000, Hyyve—which doesn’t touch the agent’s commission—takes $300. The remaining $700 goes to the homeowner upfront.

Hyyve’s job is then done and the listing falls into the regular system.

Sellers potentially stand to make much more than this. Armstrong says that in countries where similar marketplaces exist, research shows that listings can earn up to 0.65 per cent of the expected sale price. That’s $6,500 on a million-dollar home. 

On the platform’s website, it’s noted that agents in these competitive bidding situations often reduce their commission and offer additional services. That’s encouraging news for sellers, not so much for agents.

 It’s true that homeowners can keep the bid cash even if the property doesn’t sell, although there are stipulations to protect the agent from seller non-compliance. Armstrong explains that if the homeowner breaches the listing agreement by such actions as failing to facilitate showings, not cooperating or trying to fire the agent without cause, “they forfeit the bid cash” and the agent is refunded.

Safeguarding against misuse 

As for the potential issue of a client repeatedly listing the same home with Hyyve just to collect bid amounts, the platform does its best to prevent this by such measures as monitoring listing patterns and having clients meet strict eligibility criteria, says Armstrong. 

“If a seller repeatedly lists without genuine intent to sell, they can be barred from the platform.”

Cloud-brokerage Realtor, podcaster and REM columnist, Daniel Foch believes that Hyyve is a “game changer,” giving agents a centralized place to compete while providing clients with a consumer-first approach.  

He recently became a member of Hyyve’s advisory panel. His reasons?

“I want to be part of anything disruptive in real estate.”

The influx of 471,771 new permanent residents in 2023—and a targeted 485,000 for 2024—was a transformative force in driving luxury real estate demand across Canada’s major cities, according to the Sotheby’s International Realty Canada Top-Tier Real Estate: 2024 State of Luxury Annual Report. The Bank of Canada’s monetary easing, which began in June, further fueled market momentum.

Although affluent buyers are less affected by mortgage rates, successive interest rate cuts enhanced consumer confidence and facilitated movement from conventional markets into entry-level luxury segments.

By October 2024, home sales activity across Canada’s MLS systems climbed 7.7 per cent month-over-month—the highest since April 2022—followed by another 2.8 per cent increase in November. The Bank of Canada’s December rate cut of 50 basis points to 3.25 per cent is expected to further energize the market in 2025.

“Canada’s conventional and luxury real estate market demonstrated remarkable resilience in 2024 and closed the final quarter of the year with a pick-up in sales activity that foreshadows further improvement in the months ahead,” said Don Kottick, president and CEO of Sotheby’s International Realty Canada, in a press release.

Greater Toronto Area (GTA)

The GTA led Canada’s luxury market resurgence, with sales over $4 million rising 21 per cent year-over-year in 2024. Single-family homes dominated, making up 91 per cent of luxury sales in this segment. Ultra-luxury sales over $10 million increased 20 per cent, supported by a mix of MLS and private transactions.  

Calgary

Calgary experienced the fastest growth in luxury sales among Canada’s major cities. Sales over $1 million surged 42 per cent, while those over $4 million doubled year-over-year. Single-family and attached homes saw the steepest increases, reflecting a population-driven demand boom.  

Montreal

Luxury sales in Montreal showed notable resilience, with $4 million-plus sales up 16 per cent and $1 million-plus transactions rising 38 per cent. The city reported strong growth across all housing types, with condominiums seeing a 53 per cent increase.  

Vancouver

Vancouver’s luxury market lagged in 2024 due to misaligned seller expectations and a softer local economy. Sales over $4 million declined 11 per cent, while ultra-luxury transactions over $10 million fell 29 per cent. However, $4 million-plus condominium sales rose 26 per cent, reflecting an emerging opportunity in this segment.  

The bottom line

Kottick highlighted Toronto and Montreal’s revitalization as a model for national market improvement, driven by realistic pricing and falling interest rates. He also noted that Calgary continues to lead expansion in top-tier housing sales, putting unprecedented pressure on housing supply and prices.

Kottick contrasted this with a weaker picture of Vancouver’s economy, and “the ongoing standoff between sellers clinging to peak-era valuations and buyers demanding prices that reflect today’s reality” that’s slowing Vancouver’s market.

He also emphasized the long-term investment potential of luxury condominiums in Toronto and Vancouver, where declining prices and low competition create favourable conditions for buyers. As population growth intensifies housing demand, these markets are poised for future gains.  

As we reflect on 2024’s market, I can’t help but draw parallels to another pivotal moment in Toronto’s real estate history: the dramatic correction of the early 1990s. Back then, Toronto experienced what many considered unthinkable: a six-year decline that saw average home prices plummet by 28 per cent from their 1989 peak. The catalyst? A perfect storm of rising interest rates, recession and overbuilding that burst what was then considered Toronto’s first major housing bubble. 

That correction fundamentally reshaped the market. Properties that had been snapped up for $500,000 in 1989 were selling for $350,000 by 1996. Developers went bankrupt, leaving half-finished condominiums dotting the skyline. The term “negative equity” entered the everyday vocabulary of Toronto homeowners, as thousands found themselves underwater on their mortgages.

But if you look back on that period, the market appeared almost “flat” from about 1991 to 1996 after the steep drop. A similar trend can be observed in the chart above, which shows house prices since interest rate hikes started in 2022.

Where we’re at now

Today’s market might echo some aspects of that tumultuous period, with falling prices brought on by once-rising interest rates, perpetual affordability concerns, an election, changes to capital gains structure and more economic uncertainty, especially around unemployment.

So, it may come as a surprise to you that the market was warming up a bit in November (more sales, NOT higher prices). The reason we’re seeing more people buying houses in the Greater Toronto Area (GTA) is affordability.

Affordability is improving in Canadian real estate, and the GTA is at the forefront. In fact, housing affordability in Toronto has corrected more than any other major city in Canada according to the National Bank’s Q3 Housing Affordability Monitor.

A correction means that mortgage payment costs are decreasing as a percentage of household income. When people can afford to buy houses, they do. This phenomenon gave 2024 a relatively strong market in October and November, but December was slowed. 

The biggest support for the improvement in affordability could also be its greatest risk factor. RBC observed that growing household income significantly helped improve affordability in 2024’s third quarter. The challenge is the few key trends that could slow wage growth in 2025:

1. The unemployment rate is rising
2. The majority of job growth has come from government hiring
3. The likely winner of our election is committed to reducing the number of government employees

So, future improvements to housing affordability may come from a reduction in interest rates or house prices. In a healthy market, Toronto’s housing costs 40-50 per cent of median household income, and I expect it will get back there in time.

GTA 2024: A buyer’s market with caveats

For years, the GTA housing market felt like a relentless bidding ground, with escalating prices and scarce supply fueling a sense of urgency. However, 2024’s home sales reached 67,610—up 2.6 per cent from 65,877 in 2023—while new listings surged by 16.4 per cent to 166,121. On paper, this provided buyers with a clear advantage and more choice than they’d seen in years, hinting at a possible market correction.

Yet beneath the surface, the so-called “buyer’s market” has been far from a bargain. Despite the uptick in listings, the average selling price dipped by less than 1.0 per cent year-over-year, settling at $1,117,600 compared to $1,126,263 in 2023. Detached homes continued to command lofty prices, while condominiums —though subject to more notable price declines—still struggled to attract cost-conscious first-time buyers, many of whom stayed on the sidelines in hopes of greater interest rate relief down the road.

Monthly, there were some significant data points. Sales decreased by 1.8 per cent, while new listings and active listings substantially increased by 20.2 and 48.5 per cent, respectively. The average price saw a slight decrease of 1.6 per cent compared to December 2023, and days on market increased by 12-15 per cent.

The 16.4 per cent jump in new listings might suggest an easing of supply constraints, yet many sellers appeared hesitant to lower asking prices. Although the balanced supply-to-demand ratio theoretically favoured buyers, the minimal price drop signals seller resistance to resetting expectations. The gap between buyer hopes and market realities remained stubbornly wide.

Condominiums: A sector to watch in 2025

Of all the sectors in the GTA real estate market, the condominium sector is the one I’m really keeping my eye on. With more new condominium listings than ever before and record new supply added to the market in 2024, it shows no signs of letting up.

There are a few reasons for this. First, the Bank of Canada’s interest rate hikes made it more expensive for people to buy homes, causing some first-time buyers and investors to choose condominiums as a more affordable option. Second, the construction of new condominiums has been booming, which has added to supply on the market.

Despite the supply increase, condominium prices have not yet fallen as much as expected, probably not because demand remains strong but more because sellers have decided to lose money slowly rather than quickly. What I mean by this is the majority of new condominiums have been considered “cash flow negative” in the current market by Benjamin Tal and Urbanation. Based on my analysis, the majority are also “equity negative.” 

Source: Valery.ca Special Report

So, many sellers have set a floor price—that is, a minimum price they’d accept. If they don’t get that price, they decide to rent the unit out rather than sell it at a loss, allowing them to spread out the burden across monthly mortgage payments rather than absorbing it in one shot. 

Source: Robert Marsiglio, Realtor 

2025 predictions: Hope or more of the same?

Looking ahead, optimism for 2025 hinges on continued interest rate cuts and stable or marginally lower home prices. TRREB President Elechia Barry-Sproule expects improved market conditions over the next year, but the GTA market has a remarkable knack for bouncing back swiftly. Prospective buyers banking on continued softness may find themselves outpaced if the market rebounds.

Meanwhile, structural problems remain—congestion, supply constraints and stubbornly high prices. TRREB’s chief market analyst, Jason Mercer, emphasized that government policy reforms must address these core issues. Otherwise, the GTA’s real estate rollercoaster will continue with fleeting windows of affordability that close as quickly as they appear.

Far from a buyer’s utopia, 2024 felt more like an intermission. Yes, deals were occasionally on the table, but “affordable” remained a moving target—especially for those entering the market for the first time. The question persists: as we edge into 2025, will this pause evolve into genuine relief, or is it merely the calm before the next wave of price hikes? Only time—and possibly more interest rate adjustments—will tell.

The Greater Toronto Area’s (GTA) luxury housing market experienced a significant upswing in the final quarter of 2024 (Q4), with sales of properties over $3 million increasing by more than 40 per cent compared to the same period in 2023.

According to Re/Max Canada, over 360 freehold and condominium properties sold in Q4, a notable jump from 259 sales during the same timeframe last year.

“The impact of the first and second 50-basis-point rate cuts by the Bank of Canada radiated throughout the GTA in the fourth quarter, jumpstarting demand for high-end properties both within the city and suburbs,” says Re/Max Canada President Christopher Alexander.

“We’ve been expecting a surge in top-tier sales activity as the economic climate and corresponding pause in buying intentions prompted a build-up in pent-up demand. The fourth quarter did not disappoint.”

Record sales in GTA’s luxury real estate

Toronto proper accounted for 53 per cent of luxury sales, with suppressed property values creating opportunities in ultra-luxury price ranges between $5 million and $7.5 million. 

Properties over $5 million saw the most significant growth, with sales jumping nearly 59 per cent year-over-year. The $7.5 million and above category also posted gains, with sales increasing by 41 per cent, while properties over $10 million held steady compared to 2023.

Interestingly, nearly half of all $5 million-plus sales occurred in suburban areas, reflecting a growing preference for luxury homes outside the city core.

Catalysts driving growth

Several factors contributed to the resurgence of the luxury market:

• Lower interest rates. The Bank of Canada’s 100-basis-point reduction in 2024 fueled buyer enthusiasm.
• Stock market gains. Strong performances by the NASDAQ, and S&P 500 and TSX bolstered confidence among affluent investors.
• Easing inflation. Reduced economic pressures encouraged profit-taking, converting financial gains into property investments.

Luxury market outlook for 2025

While inventory challenges persist, rising buyer confidence and robust equity markets set the stage for sustained growth in Toronto’s luxury market. Affluent buyers are moving off the sidelines, and strong demand is anticipated to continue, particularly for single-detached homes.

Additionally, intergenerational wealth transfer and increased interest from international buyers, including affluent Chinese immigrants, are expected to support the high-end market.

Alexander says buyer optimism is growing, thanks to robust equity markets and lower interest rates, along with Canada Mortgage and Housing Corporation extending insurance coverage to $1.5 million for first-time buyers. “The ripple effect is expected to carry through to all price points, including the top end, as younger buyers return to the housing market.”

He also notes the political climate’s evolution from upcoming leadership changes in Canada and the United States should impact the market. However, Alexander remains optimistic.

“With the fundamentals that we are seeing take shape, we’re poised to not only sustain the strong level of luxury activity of 2024 but surpass it in 2025.”

Review the full report.

Last month, Property.ca Inc. Brokerage (Property.ca) announced the launch of its new branch of 42 agents: The Boulevard Branch in Toronto’s Little Italy neighbourhood. The group specializes in luxury residential and multiplexes. 

“The launch of The Boulevard Branch is an exciting milestone as we continue to expand our footprint across the Greater Toronto Area,” said Blair Anderson, broker of record and VP of operations for Property.ca, in a press release. “This reflects our industry-leading offering, and we look forward to continuing to grow in collaboration with our newest and legacy agents.”

Jeff Benoliel, general manager for Property.ca, identified the opportunity as part of the brokerage’s broader growth strategy. “The Boulevard Branch’s expertise and proven success align with our vision, making them a perfect fit for our brokerage. We are thrilled to welcome them,” said Benoliel.

Property.ca has over 300 agents, of which 122 joined last year. The company is on track to reach 500 agents this year.

The leadership team on joining Property.ca

The Boulevard Branch is led by Leonard Fridman and Vicky Tal, bringing a combined 52 years of industry expertise and 10 years of branch management experience. Fridman, a top one per cent nationally-ranked agent, has made over $1 billion in sales. Tal works with high-profile clientele by trading luxury real estate off market.

“The exposure to key listings is just one of the reasons why joining Property.ca was an easy choice for our team,” said Fridman.

“Property.ca’s unparalleled lead generation, cutting-edge technology and data-rich insights position us for exponential growth in Toronto’s competitive market,” Tal added.

Photos: leonardfridman.com, linkedin.com

This past year delivered a mixed bag for the Greater Toronto Area’s real estate market, with declining prices, mediocre home sales and an increase in average days on market. 

According to Wahi’s 2024 Housing Market Snapshot, early hopes for a spring rebound fell flat, and although rate cuts in the latter half of the year sparked some signs of life, they weren’t enough to drive meaningful growth. Buyers, however, benefited from a flood of inventory, keeping the market competitive and prices in check. 

Wahi’s post-mortem on the 2024 market includes TRREB data from Jan. 1 to Nov. 30, and compares it to the same time period in 2023. 

Prices down, sales flat across the GTA

The median sales price across the GTA dipped to $965,000, marking a 2 per cent year-over-year decline, while the total number of sales remained unchanged at 62,651. Homes took longer to sell, with the average DOM rising to 24 days (an increase of five days compared to 2023).

Among regions:

• Toronto saw a 2 per cent decrease in the median sales price to $888,000, while total sales also declined 2 per cent to 24,017.
• Durham posted a 3 per cent price drop to $860,000, and a 3 per cent jump in sales to 8,8682. 
• Halton’s median sale price fell 2 per cent to $1.08-million and a 3 per cent increase in sales to 7,7132.
• Peel’s median sales price dropped 2 per cent to $970,000 while the number of sales fell 2 per cent to 11,363.
• York also saw a price drop, down 3 per cent to just under $1.22-million, coupled with a 1 per cent decline in sale to 11,457.

Buyers had an advantage as inventory stayed high; the number of homes actively listed on the market remained above 20,000 from May onwards. 

The condo market remains under pressure

The GTA’s condo market underperformed compared to single-family homes, reflecting a 5 per cent decline in sales and a 3 per cent drop in median prices to $655,500. Condos also remained on the market longer, with an average DOM of 30 days (up seven days year-over-year).

High inventory levels in the condo sector, driven by new developments and investors offloading properties, contributed to downward pressure on prices. Wahi’s data shows that condos took nine days longer to sell than single-family homes on average. The company notes that GTA condo sales jumped to the highest level in three years over September, October and November. 

Single-family homes hold steady

Single-family homes displayed relatively more stability in 2024, with a 2 per cent year-over-year decline in median prices to almost $1.9-million, while sales rose 2 per cent to 39,576 units. This segment also saw a sharper recovery in the fall, as sales gained momentum during September, October and November.

Wahi identified the most popular communities based on its website’s search volume as well as neighbourhoods with the most sales. 

Most searched neighbourhoods 

1. Bowmanville (856 homes sold)
2. The Danforth (253 homes sold)
3. Jane and Finch (155 homes sold)
4. Bridle Path (seven homes sold)
5. Mount Pleasant, Brampton (481 homes sold)

GTA neighbourhoods with the most sales

1. Willowdale (1,134 homes sold)
2. Neighbourhood of Newmarket (922 homes sold)
3. Bowmanville (856 homes sold) 
4. Entertainment District (792 homes sold)
5. Neighbourhood of Aurora (754 homes sold) 

The fastest-selling GTA neighbourhoods

According to Wahi, It took longer for homes to sell in 86 per cent of neighbourhoods across the GTA in the third quarter of the year compared to Q3 2023, but in some areas, the average DOM was 10 days. 

Overbidding trends decline

For much of the year, the majority of the GTA’s approximately 400 neighbourhoods have seen prices bid down. As of November, 91 per cent of GTA neighbourhoods were in underbidding territory up from 88 per cent in October. 

A buyer’s market in transition

Wahi’s 2024 report paints a picture of a housing market in transition, characterized by more inventory and moderate price declines.

Wahi CEO Benjy Katchen sums up the year, saying in the report, “In 2024, Toronto homebuyers had more choice in the market than they have in years, with listings piling up to the highest level in recent memory.” 

The never-ending battle between supply and demand is a story well-known to those in real estate. And when it comes to the condo markets in Canada’s two largest cities, scales are heavily favouring buyers. 

According to a CIBC report, Ontario and B.C. are the biggest Canadian markets “exposed” to the slowdown in condo investment— where investors typically dominate condo purchases. The sales-to-new listings ratio in both Toronto and Vancouver shows the market currently favours buyers, with the current condo supply flooding the market.

Vancouver vs. Toronto

As Chief Economist with the BC Real Estate Association, Brendon Ogmundson has his finger on the pulse when it comes to Metro Vancouver’s housing market; he’s also observant of the activity (or lack thereof) in the Greater Toronto area.

“The big difference between Vancouver and Toronto is that prices have basically not budged in Vancouver,” he explains. “Sales in Metro Vancouver have been running around about a thousand or so a month with about 5,000 or 6,000 active listings.”

That equates to about roughly five to six months’ worth of inventory, he says.

According to Greater Vancouver Realtors, the average price of an apartment in October was $757,200, a 1.6 per cent decrease over October 2023. The Toronto Regional Real Estate Board reported the average price of a condo was $694,038 last month—a year-over-year drop of 2 per cent.

“It’s maybe slightly at the lower end of what we consider balanced—if it was really oversupplied, then we would see a lot more downward pressure on prices and we’re just not seeing that at all,” Ogmundson continues. “So maybe that’s the real difference between Vancouver and Toronto: we don’t have a real over-supply of units that would put that much downward pressure on prices.”

He adds, “It’s not as bad as Toronto.”

Pricing strategies 

Carolyn Pogue, a Realtor with Royal LePage Sterling, has been helping clients buy and sell condo properties throughout Metro Vancouver for almost a decade. When on the listing side, she implements tried and true pricing strategies based on current market conditions: 

You price low with the hope you drive multiple offers, you price at fair market value anticipating a quick sale with little negotiation or you price it high with the expectation that buyers will negotiate, and it will likely take longer to sell. 

“If interest rates keep decreasing and the buyer demand gets a little bit more intense like we’ve started to see in the last month, I do feel like 2025 will be a strong market,” Pogue shares. “I do think it will still be price-sensitive though. In terms of pricing strategy, what we’re seeing more of is either fair market value or slightly higher, with buyers negotiating off that price.” 

The pre-sale dilemma 

The sales data tells a similar story; while sales are slightly down, prices aren’t going down with them. Stefan Greiner, vice president of advisory at Zonda’s closely monitors the market, resale and presale.

“There is a significant gap in the new home market between released and unsold inventory (14,096 condominium apartments in Q3-2024) and quarterly sales (1,926 in Q3-2024),” he explains. “Sales are down 38 per cent from last year and down 45 per cent from the historical average, while active listings are up 75 per cent from last year—twice as high as the historical average.”

Greiner points out, “Buyers have choice, and builders are offering significant incentives to attract buyers.”

In the Greater Toronto Area, some of these incentives have included items such as free parking spaces, mortgage assistance and reduced deposits as developers and builders face the rising costs of construction. 

“We are at a considerable risk of some of the released and unsold units being pulled from the market, which will lead to lower condo listings in the future,” Greiner continues. “When, in reality, we should be ramping up construction and incentivizing builders to build, build, build.”

Pogue noted that this year she saw real estate developers in Metro Vancouver try to entice buyers with what she calls “pretty aggressive assignment benefits.” She explains, “We’ve seen a few that are zero assignment fee, or with a small $1,000 assignment…But the biggest thing with assignments that we find is it’s always at the developer’s discretion. So, they could say there’s no assignment fee, but when the time comes and if the seller wants to potentially assign their unit, the developer, they might not allow it.”

The future of the condo market in Canada’s largest cities 

Greiner has seen encouraging trends, particularly in the re-sale market, that could carry over into 2025. “With anticipated interest rate reductions in the coming months, we expect to see buyers re-engaging, which will lead to increased sales activity initially within the re-sale segment, before extending to the new home market”, he says. “However,  bringing new condominium apartments to market will remain a significant challenge due to persistently high construction costs, fees, approval timelines and taxes.”

CIBC predicts that the condo market will continue to favour buyers into 2025 but anticipates that the surplus in inventory will eventually be absorbed. Inversely, this anticipated demand could be met with a swing back to supply issues, with pre-sale activity at a multi-decade low. 2026 and 2027 could see a continued market dis-equilibrium, with future significant upward pressure on condo prices.

After much speculation as to whether the Toronto real estate market will be able to absorb the sea of condos that have popped up, it seems that—at least for now—the answer is no. 

Between unsold new development, assignment and resale inventory, condo supply in the Greater Toronto Area is stratospheric. Listings are way up. Toronto’s condo market has been in a slump for a while now. There’s confusion and anxiety in the sector along with historic levels of backlog, being blamed on everything from developers getting carried away to borrowing costs and tightening market conditions. Whatever the causes, many Realtors maintain that their condo listings are barely getting showings. Investors and end users are terrified and gun-shy.

GTA currently sitting on an “unprecedented” supply of condo units

The condo market “is facing its toughest challenge in decades,” says Shaun Hildebrand, president of the real estate consulting firm Urbanation. “Investors are inactive and end-user buyers currently have plenty of lower-priced options to choose from in the resale market. It may take a while, but conditions will gradually improve as developers hold back supply, construction inventory continues to drop, and demand rises with declining interest rates.”     

According to Hildebrand, condo supply in Toronto is currently at least three to five times the norm, with a combined total of nearly 40,000 condo units in limbo across all categories. He’s been quoted stating that this is an unprecedented backlog—a level “the market has never seen” which could take years to absorb. 

Condo sales down 80% annually

New condo sales in the GTA have plummeted by over 80 per cent from last year and are at a 30-year low, according to Urbanation’s 2024 third-quarter report.

“Approximately 50 per cent of existing GTA condos are owned by investors, but at current mortgage rates and rental yields, it’s hard to make the cash flow economics work, resulting in many investor owners looking to sell, and likely further slippage of prices,” states Benjy Katchen, CEO of Wahi, a digital real estate platform.

With the hope that sales improve in the coming months, there’s much expectation focused on the spring 2025 market. A number of recent reports contend that the market is already showing signs of rebounding.

“We’re starting to see demand picking up but there’s still lots of inventory and prices are still up,” says Jason Mercer, chief market analyst for the Toronto Regional Real Estate Board (TRREB). “Sellers may be reticent to drop their price if they can hold on, knowing more buyers are probably soon coming on board.” 

Rate cuts will bring buyers off the sidelines

October showed a promising uptick in transactions in some market sectors. But people “need to see interest rates come down even further,” Mercer believes. “As interest rates drop off, a lot of inventory will be absorbed.” 

He expects we’ll continue to see rate cuts. “A lot of people would have purchased in the last year but they’ve been waiting.  There’s pent-up demand.”

The abundantly-supplied condo market means there’s choice and greater affordability for buyers, who are now in the driver’s seat with the luxury of shopping around until they find exactly what they want. But the picture is anything but rosy for sellers.

Navigating the market as a Realtor

How can Realtors navigate this oddball market?

First and foremost, make sure that the unit being sold looks its best and is priced right. Many sellers are still looking for a higher price point, but the reality is they’re unlikely to get it.

“If the majority of sellers would drop their price 5 per cent, we’d see a lot more happening,” asserts ReMax Hallmark’s Christopher Bibby, one of Toronto’s top condo agents. 

Agents should be pulling out all the stops, says Bibby. “When things go wrong it’s because agents over-promise and under-deliver. You’ve got to stand out. The days of just putting a unit on MLS and social media are over…I’ll be there at showings, or go in advance to make sure the lights are on and the place is perfect.”

Better value in the resale market

For investors, pre-construction currently isn’t the way to go, he advises. “There’s better value in the resale market than in new construction right now.”

He and other Realtors also caution that demand in the micro condo market has cooled. Previously beloved by investors due to affordability, these units – sometimes as itty-bitty as 300 square feet – are now among the hardest-hit segments of the market. There’s been talk in the media that down the road this may point developers in a new direction, pivoting to larger units and giving more consideration to lifestyle needs. 

Such elements also factor into Bibby’s advice to clients to “get away from density.” The reason? If you purchase a unit in a downtown tower, “you can’t differentiate yourself,” in Bibby’s opinion. A little outside the core though, in distinctive Toronto neighbourhoods like the Distillery District; Corktown; the Junction; Queen Street West; and Little Italy, there tend to be more low and mid-rise buildings with unique characteristics, he notes.

“It’s a great time to be looking to buy. It’s not a great time to list and sell,” he adds. “We’re seeing more end users, people buying condos to live in.” 

End-user buyers choosing non-tenanted properties

Nasma Ali, a team leader with cloud brokerage Real Broker, says this can be a problematic mix. She explains: “Investors will take a condo with a tenant, where others won’t.” Tenanted properties are hard to sell in this market, so end-user buyers “will choose non-tenanted properties now that they have the pick of the litter.”

Having their choice of units also means that—where previously buyers were up against bidding wars and may only have been able to find affordable condos in the suburbs—now they’re more likely to wind up with the features and location they really want.

“Before, they’d have to go to Mississauga. Now they can get a condo in Toronto,” says Ali.

Good news for buyers, not for sellers. 

Sellers are bleeding money “but not hemorrhaging”

“I tell people that if they can hold on, do it. This is not a normal market,” Ali states. “If they can’t, there are strategies to be able to sell the unit with time – if their price undercuts everyone in the building, even if just by a bit, or if they get the tenant out, do cash for keys…”      

Sellers are bleeding money “but not hemorrhaging,” she finds. “Explain the situation, look in particular at what’s happening in the other units in the building, and provide regular updates.” 

Clients have grown more accepting of current market realities, making it easier to reason with them, in her observation. 

“I tell sellers, ‘It’s not your unit. It’s the market,’” she explains. “There are not enough buyers out there to absorb all the condos. That’s all it is.”  

A lukewarm attempt at recovery seems to be appearing in Toronto’s real estate market. For the first time in a while, it seems that demand has been able to outgrow supply. 

According to October data from the Toronto Regional Real Estate Board, active listings are still up significantly (25.3 per cent) but sales are up more (44.4 per cent).

Source: TRREB

I won’t dispute that the general sentiment in the real estate market in the Greater Toronto Area does seem to be warming up a little, with home sales up compared to October of last year. Frankly, I’d be very concerned if we didn’t see some warmth, given we’ve seen significant advantages given to buyers since then, including:

• Interest rates coming down 125 basis points
• Amortizations will be extended to 30 years, increasing buying power by 8 per cent
• Insured mortgage cutoff increasing from $1-million to $1.5-million
• Neighbourhoods have been upzoned to four units
• The government has created incentives for owners who want to add units

Warm, not hot

I deliberately chose the word “warm” because it has been pretty cold all year, and I’m not ready to describe it as “heating up.” In the past few months, new listings were up significantly, and the heightened pace of supply caused active listings to accumulate more quickly against suppressed demand. 

This month, new listings are only up 4.3 per cent compared to last year, which could dramatically slow the pace at which active supply accumulates. If sales remain strong toward the end of the year we could see some supply get absorbed and momentum build for a more pronounced spring market. As mentioned in earlier notes, rate cuts seem to be more of a pent-up supply story than a pent-up demand story so far—with sellers timing the “heating” effect just as much as buyers.

Buyer’s vs seller’s market

Homes are still selling more slowly than they did last year, now spending 28 to 30 per cent more time on the market compared to last year. This means that supply takes longer to get absorbed, and the market will definitely need to speed up its absorption rate if it hopes to see a seller’s market in the next spring. To me, our current reading on “days on market” metrics indicates a market that is balanced, or even leaning in favour of buyers, rather than sellers.

Condos

No supply/demand imbalance has been more pronounced than the 416 condo sector. As a result, looking at the 416 condo sector can often tell us a lot about the market. In the past few months, year-over-year growth in condo sales has been relatively low or negative, but in October, condo sales posted pretty significant gains. 32.2 per cent more 416 condos sold this October than last October, and similarly, 35.9 per cent more 905 condos sold. 

It is reasonable to assume that the returning affordability brought on by falling interest rates and falling condo prices has helped make these units more attainable for entry-level buyers, downsizers, and investors. Toronto condo prices have fallen 1 per cent since last year (a drop of about $7,200), while 905 condos have fallen 4.3 per cent since last year (a drop of about $27,000).

Source: TRREB

Detached homes

Detached homes have been a different story altogether. In the 416 area, detached homes are up 4.4 per cent, likely supported by upzoning to 4 units, and anticipatory demand from increased insurable mortgages and longer amortizations ahead. The knock-on effect appears in increases we’re seeing in semi-detached and townhouse products, up 3.3 per cent and 1.3 per cent respectively.

905 versus 416

This month’s data really paints the picture that we’re seeing a re-urbanization of demand. With a re-opening workplace and Toronto’s traffic being ranked third worst in the world, it is not surprising that those who suburbanized into the 905 during the pandemic era may be reconsidering a 416 lifestyle.

This trend is most visible when looking at the sale-to-list-price ratio (SP/LP) in suburban areas, like Simcoe County and Peel Region, versus urban 416 areas:

• (905) Halton Region – 98 per cent
• (905) Peel Region – 98 per cent
• (416) City of Toronto – 100 per cent
• (905) York Region – 98 per cent
• (905) Durham Region – 100 per cent
• (705) Dufferin County – 98 per cent
• (705) Simcoe County – 97 per cent

From my view, the sale-to-list-price ratio acts like a bid/ask spread indicator—where a narrower spread indicates a more efficient and liquid market. In real estate terms, a sale-to-list price ratio closer to 100 per cent suggests a more balanced market where buyers and sellers are in closer agreement on property values. When this ratio is significantly below 100 per cent, it often indicates a buyer’s market where properties are selling for less than their list price. Conversely, when it’s above 100 per cent, it typically signals a seller’s market where properties are selling for more than their asking price due to high demand.

Looking at the data, we can see that the City of Toronto and Durham Region are showing the most balanced markets with ratios at 100 per cent, while other regions are slightly favouring buyers with ratios between 97 and 98 per cent.

Points of concern

There are a few main vulnerabilities that do exist in Toronto’s market at this point that are worth noting heading into the spring market:

1. The stock market is at all-time highs, and a negative wealth effect caused by declines in that area could create issues.
2. The federal government has committed to reducing population growth and potentially reducing the population by 0.2 per cent, which certainly mutes the impact of the evergreen bull case for Toronto real estate, which is that demand will always outpace supply.
3. Unemployment is rising in Canada, as are mortgage delinquencies. These are typically leading indicators of further distressed supply and can become a headwind against house price growth.

Overall, my outlook is that we’ll see a reasonably strong spring market with policy introductions and momentum from the fall market. Barring any major changes to the economic picture, spring 2025 should look more like a typical spring market we’ve seen in years like 2018 and 2019.