As 2025 unfolds, Canada’s two largest housing markets—Toronto and Vancouver—are experiencing very different trends, despite facing similar economic challenges.
In the Greater Toronto Area (GTA), the housing market, particularly the condominium sector, continues to struggle. Over the past year, the condo market has been hit by an oversupply of units and declining demand from investors. TD Economics economist Rishi Sondhi expects this trend to persist through early 2025, with slow rent growth and a lowered population forecast contributing to the downturn. Detached home prices in the GTA also saw a slight decrease, dropping 0.5% year-over-year in the fourth quarter of 2024.
In contrast, the Greater Vancouver Area (GVA) has remained more stable. Despite facing similar economic headwinds, Vancouver’s housing market has shown resilience. Sondhi attributes this stability to differences in affordability and policy responses. Vancouver’s affordability deteriorated less sharply during the pandemic compared to Toronto, which has helped it weather rising interest rates better. Additionally, British Columbia’s provincial government implemented a series of cooling measures in 2018 and 2019, such as increasing the foreign buyer tax rate and hiking land transfer taxes. These measures led to a decline in home prices as early as 2019, while Toronto saw a sharp 8% price increase during the same period, setting a higher baseline for future growth.
Another factor contributing to the divergence is investment activity. Data from Statistics Canada shows that from 2016 to 2022, approximately 60% of investment properties in both Ontario and British Columbia were condominiums. However, the markets in these provinces have responded differently. In the GVA, condo sales saw a year-over-year increase of 14% in January 2025, while in the GTA, condo sales dropped by 12%. Sondhi noted that the ratio of condo sales to active listings in Toronto is about 60% below the long-term average, indicating a significant supply-demand imbalance in the city.
Both regions face challenges, including economic uncertainty and rising property listings, which have contributed to muted price growth despite lower interest rates and pent-up demand. However, Vancouver’s more favorable affordability conditions, combined with ongoing housing construction, position the city’s market more securely in the near future.
Sondhi also highlighted that Vancouver’s housing market has shown more resilience, with home sales in the GVA increasing by 21% year-over-year over the past three months—well above the GTA’s 8% rise during the same period. Although home prices in Vancouver have fallen, with average and benchmark prices down by 6% and 4% respectively from pandemic peaks, the declines are much less severe than in Toronto, where prices have dropped approximately 15% in both metrics.
In summary, while both Toronto and Vancouver face challenges in 2025, Vancouver’s housing market is expected to perform more steadily due to its better affordability, proactive policy interventions, and a more balanced supply-demand dynamic.
