2025 GTA New Home and Condo Market Economic Outlook

Looking back at the GTA new home and condo market, the 2024 pre-construction (pre-con) high-rise market will be known as the most brutal year for the volume of sales in a generation.

According to Altus Group statistics, January to December 2024, the number of high-rise sales dropped 63% from 12,835 to 4,720 units, and that is after a 37% decrease in the volume of sales for the same period in 2023.

The GTA pre-con low-rise market faired better with a 12% decrease, with sales dropping from 5,774 to 5.096 lots.

Overall, the volume of sales in the GTA pre-con market were down 47% in 2024.

Despite this, there are some positive factors to report about the GTA pre-con market.

The volume of pre-con high-rise units that were built in 2024 decreased by 10%, from 28,095 to 25,249 units.

Since trades and suppliers were not working at maximum capacity in 2024, Developers saw downward pressure on record high pricing from some trades and suppliers like excavation, shoring, drywall, and others.

Developers have reacted well to the market conditions by introducing less new inventory into the market, with high-rise supply dropping 67%, from 20,158 to 6,650 units. and

low-rise supply dropping 7%, from 7,260 to 6,758 lots.

This means that despite brutal sales, remaining high-rise inventory is generally unchanged from 2023 at approximately 17,000 units. Remaining low-rise inventory has increased by 53% from 3,158 lots in 2023 to 4,820 lots in December of 2024.

To put that into perspective, of the 335 total GTA high-rise projects, 80% of the 86,795 units are sold and, of the 238 total GTA low-rise projects, 84% of the 28,380 lots are sold.

Low remaining inventory is important to maintain when sales are slow as it means more stability in sale prices.

The Benchmark price of GTA pre-con high-rise is $1,018,170, with pre-con low-rise coming in at $1,551,228, both down year-over-year by only 3%.

This means that the fundamentals, other than the volume of sales, are strong with a small decrease in production of new high-rise units, less new supply being introduced into the market, and inventory remaining very low.

The pre-con industry is positioned well for consumer confidence to return the to the market.

With the Bank of Canada decreasing the overnight interest rate from 5% to 3.25% in 2024, buyers returned to the market but to the cautious looking stage, and sales remain very slow.

So, now that interest rates are moderating, why has consumer confidence not returned to the pre-con new home and condo market?

First, usually when there is a Federal Canadian or U.S. election scheduled in the near future, there is economic uncertainty, and this can result in a cooling of consumer confidence and sales of new homes and condos.

Secondly, consumer confidence is impacted by the fact that North America is supporting two major wars where one country in each conflict has nuclear weapons.

The third, and largest factor, is that consumer confidence is impacted by a lack of confidence in the Canadian Federal government’s economic policies.

Massive Federal government spending since 2020 has caused record high inflation.

Canada is experiencing an energy crisis, a food crisis, and a housing crisis at the same time.

The Federal government is discouraging new oil and gas production through regulation, heavily taxing the oil and gas industry, and continues to raise the carbon tax each year on Canadian consumers.

The carbon tax is a tax on everything that moves and heavily impacts farmers as they need a lot of energy for machinery, heating, and delivery of goods to market. The government is also putting pressure on farmers to use less fertilizer which reduces yields and increases prices.

GTA Real Estate prices are now unaffordable to many, due to massive immigration and a shortage of zoned land.

So there are many Canadians who would like to see a major change to economic policy, and we don’t know if the election will be called between April and September of this year, or even until fall of 2026.

What can we expect for the new home and condo market in 2025?

If this article had been written a few weeks earlier, the outlook would be that we would see a small increase in sales, and that the market would greatly improve six months after a positive change in government and government economic policy.

However, now the U.S. government has threatened to place tariffs on Canadian exports to the U.S. if border security is not improved and, although it is in Canada’s best interest to comply, the Canadian government is retaliating with the threat of its own tariffs on U.S. exports to Canada.

Tariffs are taxes on imports that increase the price consumers and businesses pay for goods and services. Tariffs affect spending, trade flows, government revenue, exchange rates, employment, gross domestic product (GDP) and inflation.

The Canadian Parliament has been prorogued until the end of March so the government is basically on a paid holiday.

If the tariffs remain for months, it will have a devasting impact on the Canadian economy and the new home and condo market will continue with a severe lack of sales.

U.S. tariffs on Canadian goods significantly increase construction costs in Canada by raising the price of imported building materials like steel, lumber, glass, and appliances, leading to potential project delays, strained profit margins, and ultimately, higher housing prices for consumers.

These tariffs would also cause less confidence for Developers to launch new projects, due to the uncertainty in budgeting for building costs.

The Federal and Provincial governments are taking action to secure the border with $1.3B of new spending on border security, the appointment of a Fentanyl Zar, and authorizing border security agents to cancel visas when appropriate. Provincial Premiers are also communicating with American counterparts to lobby the U.S. Federal government to respect the long and mutually prosperous relationship between the two countries.

Since tariffs impact both U.S. and Canadian consumers with higher prices and inflation, it is in both country’s best interest to minimize tariffs.

If Canada avoids a dramatic tariff war with the U.S., 2025 will be a great time for consumers to buy new homes and condos because they will have a wide choice of inventory and strong incentives, unlike when the strong market returns.

How do we know a rise in prices and the volume of sales are in the future?

Even with recent moderate cuts to immigration, there is still a large shortage of zoned land, considering the GTA’s population growth.

When the slow sales of 2023 and 2024 result in a pause in construction starts, this will ultimately result in a lack of new inventory being introduced into the marketplace in 2027 and 2028. This will cause prices to skyrocket, due to a severe shortage of supply and constant demand.

So with all of this in mind, we are in a buyers market and now is the best time to buy a pre-con high-rise condo or low-rise home from a reputable Builder, in a good location, with a long closing date.