Regional Housing Outlook: Toronto Still Lagging Despite Signs of Recovery Elsewhere

Toronto | September 30, 2025 — Mortgage.Expert News Desk

Filed on 29-Sep-2025, 14:00 EST via Mortgage Professional Australia.

Canada’s housing market is showing early signs of life after months of sluggish sales and cooling demand. Yet in the Greater Toronto Area (GTA), the recovery remains uneven, with ongoing condo market stress, excess inventory, and affordability headwinds holding back momentum.

---

National Recovery Signals

Across many Canadian regions, activity is gradually returning:

• Lower interest rates following the Bank of Canada’s September rate cut are reviving buyer sentiment.
• Western provinces like Alberta and Saskatchewan are seeing stronger resale activity, fueled by population inflows and more balanced affordability.
• Atlantic Canada continues to outperform, with smaller markets attracting both retirees and remote workers.

By contrast, Toronto’s housing market — long viewed as Canada’s most dynamic — is lagging the pack.

---

Why Toronto is Different

1. Condo Market Stress

Toronto’s high-rise condominium sector is under pressure from:

• Over-supply: Thousands of new units hitting the market in 2024–25, adding to inventory.
• Investor pullback: With financing costs still relatively high, many small investors are deferring purchases or selling.
• Rental market squeeze: Rising vacancies in certain downtown pockets have pressured condo rents, weakening the investment thesis.

2. Affordability & Stress Tests

Even with lower mortgage rates, Toronto’s average benchmark price — hovering around $1.05 million — keeps affordability stretched. For first-time buyers, Canada’s mortgage stress test continues to require proving ability at rates 2% above contract, limiting qualification.

3. Consumer Confidence

Compared to other cities, GTA buyers remain more cautious. Uncertainty around condo fees, property taxes, and the city’s rising infrastructure costs add hesitation for many households.

---

Voices from the Market

Mortgage brokers in Toronto say activity is “lukewarm” compared with past fall seasons. One downtown broker noted:

“We are seeing inquiries pick up since the rate cut, but most buyers are shopping cautiously. They want clarity on pricing trends before committing.”

Meanwhile, developers with unsold inventory are offering incentives like free maintenance for 1–2 years or small cash-backs on closing.

---

Outlook for the Rest of 2025

Industry experts see a two-speed market:

• Detached and low-rise homes in suburban GTA may recover faster due to limited supply and continued immigration demand.
• Condos in the downtown core could remain under pressure into early 2026, unless investor confidence returns or immigration absorbs more units.

Nationally, Toronto’s slowdown may temper overall Canadian housing recovery numbers, given the city’s weight in sales and prices.

---

Why It Matters for Borrowers

• If you’re a first-time buyer in Toronto, this may present opportunities to negotiate better terms on condos, though affordability remains tight.
• Existing owners renewing mortgages should be aware that despite falling rates, condo values in some areas may stagnate, affecting equity positions.
• For investors, Toronto’s rental trends must be closely tracked before committing new capital.

---