When is a Good Time to Buy a Condo in Toronto?

Toronto, a city known for its vibrant culture and resilient economy, is currently experiencing a unique phenomenon in its real estate market. Despite record immigration levels, the demand for condominiums has dropped significantly. This surprising trend presents an incredible opportunity for first-time homebuyers and long-term investors.

Why Real Estate is a Resilient Investment

Historically, real estate has always been considered one of the most profitable and stable investments. Toronto represents a dynamic market with substantial returns over time. However, rising housing prices and high interest rates in recent years have created challenges for buyers and investors.

As these conditions become the new “normal,” some are questioning whether now is a good time to re-enter the real estate market. Let’s explore why this could be an ideal moment to invest in a Toronto condo.

2024: A Shift to a Buyer’s Market

As we look toward 2025, the condo market in Toronto has firmly shifted into a buyer’s market. This means buyers now hold the upper hand in terms of pricing power and the availability of units.

According to TRREB Chief Market Analyst Jason Mercer:

"The condominium apartment segment continued to experience lower average selling prices compared to a year ago. Condo buyers are benefitting from a lot of choice and therefore negotiating power. This will attract renter households into homeownership as borrowing costs trend lower in the months ahead."

Increased Inventory

Recent data reveals a record number of condominiums available for purchase in Toronto. This surge in availability is almost unprecedented in one of North America’s most dynamic property markets. For prospective buyers, this translates into:

• A wider selection of units to choose from.

• Greater bargaining power when negotiating prices.

Key Economic Indicators Impacting Housing Prices

Unemployment Rates

The unemployment rate in Toronto was 8.1% as of November 2024, slightly above the long-term average. While full-time employment increased between October and November 2024, it’s crucial to monitor whether this trend continues. Employment stability often influences housing market activity, making this a critical factor to watch.

Central Bank Policies and Interest Rates

Interest rates are a critical driver of real estate market trends. Historically, lower rates stimulate demand by reducing monthly mortgage payments. As of late 2024, the Bank of Canada’s policies are under scrutiny. If lending rates are reduced in the coming months, it could:

• Lower the cost of borrowing.

• Attract more buyers to the market.

• Drive demand and potentially increase prices.

The potential for rate reductions in 2025 makes this an opportune time for buyers to secure favorable deals. This is coupled with several federal incentives for first-time homebuyers. You can read more about these incentives here.

Why Now is a Good Time for Long-Term Buyers

If you’re considering purchasing a condo as a long-term residence, the current market conditions make this an exceptionally strategic time to buy. Unlike those looking to flip properties for short-term gains, future homeowners benefit from:

1. Affordability Advantage: With prices lower and an abundance of choices, you can secure a unit in a prime location without overextending your budget. This stability is crucial for buyers planning to settle into their homes for years to come.

2. Negotiate Favorable Terms: The oversupply of condos gives you significant leverage to negotiate price reductions, incentives, or upgrades from sellers. These perks add immediate value to your purchase.

3. Positioning for Future Appreciation: While the market may currently be slower, real estate in Toronto has a proven track record of resilience and long-term appreciation. Buying now ensures you lock in at a lower price point before interest rates drop and demand rebounds.

4. Escape the Rental Cycle: Many prospective buyers are currently renters facing ever-increasing rental costs. Purchasing a condo not only provides stability but also allows you to build equity over time instead of paying a landlord.

5. Create Long-Term Wealth: Buying real estate is one of the most reliable ways to grow your wealth over time.

By focusing on long-term goals, buyers can capitalize on today’s market conditions to secure a home that offers lasting value and personal satisfaction.

The Toronto condo market in 2024 presents a good opportunity for buyers. With a record number of properties available and less competition, there’s significant potential for favorable deals and strong future gains.

If you’re looking for a long-term home rather than a quick flip, the current conditions provide the perfect balance of affordability and opportunity.  You need to work with a savvy realtor who can help you navigate the intricacies of the condo market. If you’re looking to buy in 2025, let’s start the conversation today!