Prices Stabilize, But Affordability Remains a Concern

After peaking in 2022 and experiencing slight corrections in 2023 and 2024, home prices in both Toronto and Vancouver have shown signs of stabilization in early 2025. Average detached home prices in Toronto hover just under $1.3 million, while Vancouver sits slightly higher. Still, for many first-time buyers, affordability remains out of reach without major financial support or alternative financing models.

Renters Feeling the Pinch

Rental rates in both cities continue to rise, with average one-bedroom apartments in central areas reaching over $2,500 per month. High demand from new immigrants, international students, and remote workers returning to the city core has tightened supply—even as new rental units come online.

New Construction Surges… Slowly

Both municipalities have ramped up approvals for high-density housing, with condo towers and mixed-use developments growing rapidly along transit corridors. However, labor shortages and supply chain issues continue to slow actual completions, pushing many projects into late 2025 and beyond.

Investors Take a Step Back

With higher interest rates and stricter regulations on short-term rentals, many investors have exited or paused purchases in the condo market. This cooling effect has opened a window of opportunity for end-user buyers, especially in pre-construction segments.

The Suburban Shift Evolves

Suburban areas like Hamilton, Langley, and Oshawa are seeing strong activity, especially from young families seeking more space at relatively lower costs. Improved transit links and remote work flexibility continue to make outlying areas attractive alternatives.

What’s Next?

Experts predict a relatively balanced market for the rest of 2025. Much depends on Bank of Canada decisions, immigration flows, and whether construction can meet demand. For buyers and renters alike, the key may be flexibility—considering location, type, and timing.