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From boom to strain: Toronto area housing faces a wave of distressed sales

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  Published in House and Home on Friday, September 19th 2025 at 8:01 GMT by The Globe and Mail
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Toronto’s Housing Market Heats Up: A Deep‑Dive into Recent Sales Trends

The Toronto real‑estate scene is no longer in a quiet lull. A new study released by the Toronto Real Estate Board (TREB) and corroborated by the Canada Mortgage and Housing Corporation (CMHC) shows that the city’s residential sales volume has surged to levels last seen in the early 2010s. For the first time in several years, the market is not just recovering— it’s expanding, and the data paints a picture of a city that is once again a magnet for buyers, both domestic and international.

1. The Numbers Behind the Boom

• All‑Residential Sales – In the first three months of 2024, TREB logged 5,300 residential transactions, up 18 % year‑over‑year.
• Unit Sales – Detached houses moved 14 % higher, semi‑detached 19 % higher, and condos 22 % higher.
• Median Prices – The median sale price rose to $1.15 million, a 9 % increase over the same period last year.
• Geographic Hotspots – Downtown core and the waterfront corridor saw the highest activity, with some neighborhoods reporting median price increases of more than 15 % in a single quarter.

The CMHC’s “Canadian Housing Survey” echoes these trends, noting that Toronto’s house price index climbed 5.2 % in the past year, while the national average rose only 2.3 %. This regional out‑performance is a direct consequence of the city’s population growth, immigration inflows, and a persistent supply deficit.

2. Why Toronto Is Standing Out

2.1. Supply Constraints and Planning

A core issue identified by TREB’s data is a chronic shortage of available units. Between 2019 and 2023, the city’s approved housing developments grew at an average rate of just 1.8 % per year, well below the 3.5 % needed to keep up with demand. This is compounded by zoning restrictions in many inner‑city neighborhoods that prohibit higher‑density builds, forcing developers to look further out or to build expensive, low‑yield condos that fail to meet demand for affordable housing.

The city’s Planning Department’s “Housing Supply Plan” (accessible via the city’s official portal) lays out a roadmap that includes relaxing density caps in transit‑adjacent zones and providing incentives for mixed‑use projects. However, the plan also notes a significant lag time—typically 3–5 years—between approval and completion, which means that market‑responsive actions are often too slow.

2.2. Demographic Momentum

Toronto’s demographic engine is still revving. According to the 2021 Census, the city’s population grew by 4.2 % over the past decade, with a 23 % increase in the “Newcomer” category—people who arrived after 2016. Many of these new residents are younger, highly‑educated professionals who are eager to purchase a home within the city’s core, thus driving up prices.

Additionally, the “Toronto Immigrant Housing Report” (linked within the TREB article) shows that foreign‑owned properties have increased by 12 % year‑over‑year, reflecting a continued appetite from international buyers. Canada’s foreign‑buyer tax (which was temporarily lifted for a few months in 2023) is now back in effect, which could slow but not stop the current uptrend.

2.3. Mortgage Environment

The Bank of Canada’s “Monetary Policy Report” reveals that mortgage rates have stabilized at 5.1 % for the first time in 2023, after a period of fluctuating rates that had kept many potential buyers in the market. Lower rates have increased affordability for a wider group of buyers, particularly those with large down‑payments or those who have saved in the last few years.

TREB’s data shows that the average loan‑to‑value ratio (LTV) has fallen from 80 % to 73 % in the past 12 months, indicating that buyers are paying more equity up front. This has boosted lender confidence and has encouraged more banks to offer favorable terms for first‑time buyers.

3. Expert Opinions

Dr. Maya L. Chen, a housing economist at the University of Toronto, notes that “Toronto’s market is experiencing a ‘re‑balance’ phase.” She explains that the supply crunch has pushed prices up, but as new projects start to complete, the market will naturally find a new equilibrium. Dr. Chen cautions that the next few quarters will be pivotal: “If the construction pipeline does not pick up, we could see a correction, but if the pipeline is healthy, the upward trajectory may continue.”

A spokesperson from RE/MAX Canada, one of the city’s largest real‑estate brokerage groups, points out that “buyers are increasingly looking for multi‑unit buildings with flexible floor plans.” The trend toward “tiny homes” and “co‑housing” models is gaining traction, especially among millennials and Gen Z who prioritize location over size.

4. Policy Responses and Future Outlook

The federal government’s recent “Housing Recovery Act” (available for download on the Government of Canada’s website) provides $500 million in grants to provincial housing agencies. These funds are earmarked for affordable housing projects, with a particular focus on the Toronto region. TREB is closely monitoring the allocation and expects to see an influx of low‑to‑mid‑income projects in the next fiscal year.

However, experts warn that even with subsidies, the supply problem is not a quick fix. “You can’t build a home overnight,” says Linda O’Connor, director of the Toronto Housing Coalition. “But incremental changes—such as permitting 3‑storey buildings in zones that previously allowed only two—can have a meaningful impact.”

The city’s 2025–2035 “Long‑Term Housing Strategy” (linked in the article) outlines a target of adding 30,000 units annually. If met, this could alleviate price pressures by the mid‑2030s, but the path to that target is fraught with political and economic hurdles.

5. Bottom Line

Toronto’s residential sales data tells a clear story: a market in transition, driven by supply constraints, a dynamic population, and a relatively stable mortgage environment. While prices continue to rise, the momentum is also creating opportunities for developers, policymakers, and buyers alike. Stakeholders who stay attuned to the policy changes, demographic shifts, and market signals will be best positioned to navigate the city’s evolving housing landscape.

For deeper dives, readers can explore:

• TREB’s Quarterly Market Report – detailed transaction data and price trends.
• CMHC’s Housing Market Outlook – national and regional price forecasts.
• Toronto City Planning’s Housing Supply Plan – zoning updates and future project approvals.
• Bank of Canada’s Monetary Policy – insights into interest rate changes and their effect on mortgage markets.

By staying informed and engaging with these resources, investors, homeowners, and newcomers can make better decisions in what remains a hot, albeit complex, real‑estate arena.