Toronto Condo Market in 2025: A Reality Check

Toronto’s real estate market has always been a hot topic, but the condo sector is facing unique pressures in 2025. With appraisals coming in low, nine condo projects already cancelled this year, and shifting buyer sentiment, the question remains: who’s really buying Toronto condos right now?

Low Appraisals Are Hurting Buyers

One of the biggest issues is appraisals that fall below the agreed purchase price. Buyers are often left covering gaps of hundreds of thousands of dollars with additional down payments. While some can manage the extra cost, many cannot, creating deal stress and shaking overall confidence in the condo market.

Cancelled Projects Raise Red Flags

Nine Toronto condo projects have already been cancelled in 2025, on the heels of 11 cancellations last year. Developers are struggling to meet pre-sale requirements due to weaker demand and higher construction costs. This slowdown in new builds could mean a condo shortage in five years when those units would have been completed.

Rentals Rising as Condos Stall

Developers are increasingly turning to purpose-built rental construction, reflecting changing market demand. With affordability challenges, more Torontonians are renting for the long term. If this trend continues, Toronto could follow the path of major European cities, where renting is the norm and ownership is far less common.

TRREB Numbers: What They Don’t Tell You

Recent TRREB data shows a small increase in sales compared to last year, but prices are down roughly five percent. Sellers are slowly adjusting expectations, often reducing prices to align with buyer demand. Month-to-month activity suggests stability, but year-over-year numbers still highlight weakness.

The Economic Backdrop

Beyond real estate, the Canadian economy is cooling. Exports are down, job losses are rising, and GDP per capita growth has flatlined. These economic headwinds directly affect consumer confidence and housing affordability.

Key Takeaways for Buyers and Sellers

• Buyers should prepare for low appraisals and higher down payment requirements. Early conversations with mortgage brokers are essential.

• Sellers need to price realistically to avoid extended listings and downward pressure.

• Investors may find opportunity in rental properties, but should approach pre-construction condos with caution.

Wrap Up

Toronto’s condo market in 2025 is one of caution and recalibration. With cancelled projects, low appraisals, and economic uncertainty, fewer people are buying condos compared to past years. Yet, long-term demand for housing in the city remains strong, and today’s slowdown may set the stage for future shortages.

For now, the market favours buyers who are prepared and sellers who are realistic. As always in Toronto real estate, timing and strategy make all the difference.