Highlights

• Toronto Metro housing recovery continues, but prices declined.

• Rental conditions strengthen and rising rents support gradual market recovery.

• Recent developments challenge the future housing shortage narrative.

• Exploring the dynamics and distribution of the population decline in Canada.

• Temporary resident permits provide a clue about Canada's immigration system recalibration.

• Lower prices and higher incomes continue to push housing affordability in the right direction.

• Update on Canadian insolvencies and the "technical recession".

Real Estate Market

Toronto Metro real estate market continued to recover in June. Both sales and new listings increased, while active inventory declined relative to the 10-year average.

This resulted in both market balance indicators tightening on the same basis.

All key price metrics declined except the seasonally adjusted benchmark price (not shown in the chart below), which increased for the first time since May 2025.

Rental Market

Toronto Metro rental market also strengthened in June. The key market balance indicator - Months of Inventory - improved relative to the 10-year average.

Rent prices increased, as is typical for this time of year.

However, the rate of increase was larger than last year's, bringing rents closer to year-ago levels and supporting the narrative of a strengthening rental market.

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Highlights

• Toronto Metro housing market conditions strengthened further in May, with a tighter balance and firmer prices.

• Is the condo sector leading or lagging the market recovery?

• Rental trends shifted again after April’s rebound, with more detail in the latest data.

• [Paid] Has the Toronto Metro real estate market bottomed? A major bank may have just offered a clue.

• [Paid] Canada has entered a technical recession, but there are important nuances.

• [Paid] What does the Financial Stability Report reveal about household finances?

• [Paid] Labour market trends are improving, while recent economic data may be reshaping the interest rate outlook.

• [Paid] A notable development in new-home sales could signal a turning point.

• [Paid] Important trends in the Toronto Metro new construction segment.

Real Estate Market

The Toronto Metro real estate market gained further ground in May. Sales activity increased, while both new listings and active inventory declined compared to the 10-year average.

These changes led to a tightening of market conditions, with both market balance indicators reaching their strongest levels in the past two years.

All key price metrics increased, which is typical for this time of year. The only statistics that continued to decline was the seasonally adjusted benchmark price (not shown on this chart).

It is still premature to call this a price recovery, as market balance remains weak. However, if the recovery in market conditions continues, price recovery should eventually follow. May typically represents the seasonal peak in price strength, followed by softer conditions toward year-end.

The Toronto Metro condo sector is lagging the broader market recovery, showing relative weakness in May.

Price-wise, the condo sector is lagging as well, as the price differential with single-family homes continues to increase.

Rental Market

The Toronto Metro rental market weakened in May following an uptick in April. This was largely expected based on historical patterns (link). Overall, the market remains relatively stable and continues to strengthen gradually.

Rent prices increased in May, which is typical for this time of year. However, they remained 2% below last year’s level.

Comparing the annual change in Toronto Metro average rent price confirms a stabilization trend.

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Highlights

• The Toronto housing market showed early signs of stabilization as sales activity strengthened in April.

• Market balance improved modestly, and prices increased.

• [Paid] Rental market activity picked up, but the sustainability of the rebound remains uncertain.

• [Paid] Population growth data became increasingly difficult to interpret amid immigration policy changes.

• [Paid] Inventory trends challenge the narrative of sharply slowing population growth.

• [Paid] Interest rate expectations shifted higher as inflation concerns re-emerged.

• [Paid] One of the key risks to monitor.

• [Paid] Housing affordability initiatives from the Spring Economic Update 2026.

Real Estate Market

Activity in the Toronto Metro real estate market picked up in April, with sales, new listings, and active inventory all increasing relative to their 10-year averages.

Increase in sales was the main highlight, with the seasonally adjusted figure showing 6.1% monthly growth. As a result, both market balance indicators strengthened.

All key price metrics increased compared to the previous month, which is typical for this time of year. Seasonally adjusted benchmark price remained relatively unchanged, suggesting some stabilization after 10 months of consecutive price declines.

Rental Market

The Toronto Metro rental market strengthened in April relative to the 10-year average.

However, it does not yet appear to be a reliable signal, as similar April spikes were observed in each of the past three years. Next month’s data will be more telling.

The average rent increased compared to the previous month but remained 3% below last year’s level.

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Highlights

• A seasonal pickup masks the reality - sales and new listing activity in the Toronto Metro are quietly declining.

• The Toronto Metro rental market remains weak but stable.

• [Paid] Population decline is deeper than expected, with further downside likely; new refugee system changes introduced.

• [Paid] Real estate investment conditions remain unattractive in the Toronto Metro, even after a major price correction.

• [Paid] Stability and risks in the macro landscape.

• [Paid] Government support for Ontario’s new construction sector has arrived.

• [Paid] Support impacts for the new construction sector will be uneven, with some segments benefiting more than others.

• [Paid] Is the New Residential Rental Property Rebate a hidden bailout? Potential implications.

Real Estate Market

The slowdown in Toronto Metro real estate activity observed in February continued into March. Both sales and new listings further declined below the 10-year averages, while active inventory was largely unchanged on the same basis.

Notably, several news outlets highlighted the year-over-year increase in sales. However, when compared to the 10-year average, sales actually declined month-over-month, and the Toronto Regional Real Estate Board’s own seasonally adjusted data showed a mere 1.4% monthly increase in sales - a rounding error, given the data revisions exceed 10%.

I’ll be the first one celebrating an increase in Toronto Metro sales since I highlighted a number of times how abnormally low they are (link[paid]), but that’s not the key story today. Yes, sales are higher compared to March 2025, but that comparison is of limited value, as activity last year temporarily dropped to exceptionally low levels.

More relevant is the recent decline in new listing activity. It remains unclear whether sellers are holding off for the spring market or withdrawing due to unsatisfactory pricing. Upcoming data should provide clarity. At the same time, despite financial strain and a soft labour market, there are still no signs of widespread forced selling that would significantly increase inventory.

I must clarify that forced selling does exist and is gradually rising, as reflected in the increase in power-of-sale listings. However, it does not yet pose a systemic risk.

I have intentionally removed the scale from the chart to avoid misinterpretation, as it reflects only a subset of listings. The key takeaways are that power-of-sale listings are trending upward and have more than doubled year-over-year.

Both market balance indicators strengthened slightly relative to their 10-year averages,

though the change is minimal and largely noise rather than a meaningful shift. Yet it was also picked up by news outlets.

All key price metrics increased in March, driven primarily by seasonality and a higher share of luxury transactions. However, the seasonally adjusted benchmark price continued to decline.

The condo segment remains weaker than the overall market, although the gap narrowed - something worth monitoring.

Rental Market

The Toronto Metro rental market softened slightly in March relative to the 10-year average.

Rents declined marginally, though the market is entering a period of strong seasonal demand, which should provide near-term support.

Low-rise rental properties have recently begun to underperform. In the current downturn, weakness originates in the condo segment before spreading to other housing types with a lag. As a result, the gap between condo and house rents is likely to narrow further. The return-to-office trend may also contribute to this shift.

Read more

Highlights

• Toronto home sales hit February lows unseen since 1995, while prices show seasonal gains masking underlying declines.

• The condo segment remains weak, especially for smaller units, with no material turnaround yet.

• The Toronto rental market is soft and affordable, supported by strong leasing activity.

• [Paid] Canada’s population growth slows, with permit issuance falling in 2025.

• [Paid] The labour market is recovering, but credit card debt reached a record high level.

• [Paid] New home sales activity remains very low, while pre-construction condo price premiums deserve close attention.

• [Paid] Mortgage rates and housing affordability were stable, with homeowners betting on lower mortgage rates ahead.

Real Estate Market

The Toronto Metro real estate market slowed in February. Both sales and new listings declined, while active inventory remained relatively unchanged compared to the 10-year averages.

Notably, nominal sales were the lowest for the month of February since 1995, and active inventory declined compared to the previous year for the first time since July 2023.

As a result, market balance indicators were mixed but largely stable, with the sales-to-new-listings ratio partially rebounding following the previous dip. The levels of these indicators remain historically weak and correspond to annual price declines in the range of roughly 8–12%.

All key price metrics increased in February, reflecting seasonal factors rather than a shift in underlying market dynamics. After seasonal adjustment, the price of a typical property (benchmark price) declined.

The condo sector remains weaker than the overall market, and no material changes have occurred there.

Within the condo segment, smaller units are experiencing the largest price declines, as noted in recent analysis by Urbanation and CIBC.

Rental Market

The Toronto Metro rental market remains weak but stable, with market balance changing only slightly compared to the 10-year average.

Rents continued to decline in February, driven by weak market balance and seasonal factors.

The pace of decline remains relatively stable at approximately 4% per year.

Interestingly, the current level of market balance in the Toronto Metro condo sector suggests that condo rent prices should not decline at all and remain relatively stable.

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Highlights

• January broke the market’s recovery streak as softer sales met rising supply.

• Rental conditions slipped slightly, but stability continues to defy big supply-demand swings.

• A tale of two rental markets: private listings vs. purpose-built apartments

• [Paid] Population growth is slowing, hitting Toronto harder than most.

• [Paid] New home sales sank further while the new-vs-resale price gap stretched to extremes.

• [Paid] Housing Construction in 2025, with a glimpse into 2026.

• [Paid] Affordability quietly improved, reaching a key milestone.

• [Paid] Economic growth momentum weakened, but labour markets are showing early signs of resilience.

Real Estate Market

The Toronto Metro real estate market weakened in January. Sales declined, while both new listings and active inventory rose relative to 10-year averages.

As a result, market balance indicators deteriorated on the same basis, breaking the gradual strengthening trend observed since May 2025.

January weather conditions were exceptionally harsh across the Toronto Metro and likely contributed to weaker activity. February data should help clarify whether this was a one-off disruption or the start of renewed market softening.

Meanwhile, home prices continued to decline.

Rental Market

The Toronto Metro rental market weakened slightly in January compared to the 10-year average.

Overall, the rental market balance has remained remarkably stable over the past two years, with January 2026 reading only marginally weaker than in 2024 and 2025.

Later in this report, we will analyze supply-and-demand dynamics to assess whether they help explain the stability observed in the rental market balance.

Despite this relative stability, rental market conditions remain weak. Combined with seasonality, this continues to place downward pressure on rents, creating favourable conditions for renters.

So far, the rental market analysis has focused on MLS-listed units, which largely reflect the private rental market. By contrast, CMHC provides insight into the purpose-built rental apartment segment. CMHC’s data are published annually and reflect conditions as of October.

The latest figures show that vacancy rates in Toronto Metro apartment buildings rose between 2024 and 2025.

Vacancy levels are elevated but remain below concerning thresholds. The increase was observed across all unit types except bachelor units.

Vacancy rates for those units surged unusually high in 2024, so the latest reading should be interpreted with caution. Overall, it is reasonable to conclude that vacancies rose broadly across all unit types.

Asking rents for vacant units declined in 2025, while average rents for occupied units continued to rise.

This stands in contrast to the private rental market, where rents, comparable to vacant-unit rents in this dataset, fell below 2023 levels. This is because purpose-built rental units are more affordable overall and therefore more resilient.

Population Growth

Recent data show that the number of temporary resident permits has been trending higher than typical seasonal patterns.

Read more

2025 was a challenging year for the Toronto Metro real estate market. The housing correction that began in 2022 continued, with prices falling to new lows and new construction sales collapsing. Population growth continued to slow, while housing completions remained robust, creating conditions for excess supply and rental market weakness. Declining interest rates helped support household financial well-being, while deteriorating trade relations with the United States increased economic uncertainty. Overall, the Canadian economy performed relatively well in 2025, as risks related to elevated unemployment and yield-curve inversion did not translate into a broad economic slowdown. Below are the top 10 charts highlighting key trends in 2025, with some insight into 2026.

From Population Inflows to Outflows

2025 marked the year when net inflows of temporary residents into Canada turned into net outflows. While the deceleration in inflows began in 2024, outflows exceeded inflows for the first time in 2025, serving as a primary driver of Canada’s population growth slowdown.

Looking ahead to 2026, net outflows of temporary residents are expected to persist, potentially causing Canada’s total population to decline for the first time in recorded history. On a quarterly basis, population contraction already occurred in Q3 2025, though not yet on an annual basis.

Rental Market Construction Boom in Canada

At the time, when population growth in Canada is slowing down, its rental market is experiencing a construction boom, with 2025 setting new records for both rental starts and completions. More than half of all housing units that began construction in Canada in 2025 were purpose-built rental units.

The picture is different in the Toronto Metro. Although rental starts have increased as well, they represent only about 35% of total starts, while overall housing starts in the region continue to decline. This setup is likely to result in a near-term excess of rental supply in Canada.

Rental Inventory Reached the Highest Level on Record

Driven by net outflows of temporary residents, a weak labour market and robust levels of new housing unit deliveries, MLS-listed rental inventory in the Toronto Metro reached its highest level since at least 2012. Those listings represent only a subset of the overall rental market.

While strong rental demand has prevented significant weakening, slowing population growth is creating downward pressure on rents, making the rental market one of the key areas to watch in 2026.

Record-Low Real Estate Sales

Toronto Metro real estate sales activity fell to its lowest level since at least 1989. To allow for meaningful comparisons across time, sales were measured relative to the total number of households in each year.

The Most Significant Price Declines Since the 1990s

Home prices in the Toronto Metro fell by 24% from the 2022 peak. Adjusted for inflation, the decline reached 32%. Of this total, 2025 accounted for 5% nominal and 6% real price declines.

While prices are likely to continue trending down in the near term, early signs of market stabilization were observed toward the end of 2025.

Have Interest Rates Reached the Bottom?

The Bank of Canada cut the policy rate four times in 2025, for a cumulative reduction of 1%, bringing the interest rate to 2.25%.

The central bank also signalled that the current policy rate is appropriate given its economic outlook, suggesting the easing cycle has likely ended unless unexpected shocks occur. Markets are also now anticipating a period of rate stability, followed by eventual increases, though time will tell whether these expectations prove accurate.

Housing Affordability Improved but Prices Remain Detached from Fundamentals

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Highlights

• Toronto Metro home sales activity increased in December, while active inventory declined sharply.

• Market balance improved modestly but remains historically weak, with prices still declining.

• 2025 housing market performance in historical context.

• Rental market conditions remain stable, though rents continue to decline.

• Toronto Metro rental affordability: measuring conditions and unpacking overlooked dynamics.

• Housing affordability trends and what lies ahead.

• Toronto Metro real estate investment attractiveness, with a focus on pre-construction investors facing 2026 completions.

• Population growth in Canada slowed sharply in Q3.

• Distribution of the temporary resident outflows.

Real Estate Market

In December, the Toronto Metro real estate market continued to strengthen. Sales ticked up modestly, while active inventory declined sharply relative to the 10-year average. New listings, however, remained largely unchanged.

With December marking the end of 2025, it is time to step back and assess full-year performance against historical benchmarks. Annual home sales in the Toronto Metro fell to their lowest level since 2000.

At the same time, new listings reached their highest level since at least 1990,

Average active inventory climbed to its highest level since 1995.

If those metrics are adjusted for population growth, recent values will be reduced compared to the older ones. For example, sales would become the lowest since at least 1988.

Market balance indicators improved slightly in December but continued to remain at historically weak levels.

On an annual basis, the average sales-to-new-listings ratio in 2025 was the weakest since 1990.

All price metrics continue to decline, driven by the weak market balance and seasonality.

The condo sector remains softer than the overall market, with no major developments to report.

Rental market

The Toronto Metro rental market remains weak but relatively stable compared to the 10-year average.

As a result, rent prices continue their decline, amplified by seasonality.

Read more

Highlights

• Toronto Metro’s housing market is stabilizing, but key indicators remain weak.

• Rental supply is expected to remain elevated as the construction pipeline remains substantial.

• Near-term and long-term impacts of Canada’s new immigration plan.

• Economic data is improving, but household financial stress continues to build.

• Toronto Metro housing affordability is improving as prices ease and incomes rise.

• Mortgage renewals and rising arrears warrant close attention.

Real Estate Market

The Toronto Metro real estate market continued to strengthen in November. Sales, new listings, and active inventory all declined relative to their 10-year averages.

Market balance indicators showed mixed signals. Months of Inventory, which measures how long it would take to sell all active listings at the current monthly pace, weakened, while the Sales-to-New-Listings Ratio, calculated as sales divided by new listings within a month, improved on the same basis.

Overall, they both remain significantly weaker than historical averages, and as a result, prices are declining.

The condo sector continues to underperform the overall market, with no meaningful change. Toronto Metro’s rental market remains weak but stable, with rents edging slightly lower.

Read more

Highlights

• Toronto Metro’s resale market strengthened in October, though prices continued to edge lower.

• Rental market remained weak but stable, with tighter balance than a year ago and rents rising in September. What could be behind this resilience?

• Assessing valuations in the new construction condo sector

• Unpacking shifts in mortgage rates and housing affordability

• Key insights from the latest Monetary Policy Report

• Update on household financial well-being

• Is relief for the labour market on the horizon?

Real Estate Market

Toronto Metro’s real estate market strengthened in October, with new and active listings declining and sales showing a slight increase relative to 10-year averages.

As a result, both market balance indicators — Months of Inventory, which measures how long it would take to sell all active listings at the current monthly pace, and the Sales-to-New-Listings Ratio, calculated as sales divided by new listings within a month — improved on the same basis.

All key price metrics declined in October, though the seasonally adjusted benchmark price edged higher.

Rental Market

Toronto’s rental market remained weak but stable, closely following the seasonal trend. Market balance in September was stronger than a year ago.

Average rents increased slightly, which is unusual for this time of year.

That outcome is somewhat surprising, given that Toronto’s population likely declined over the past year while 36,000 new housing units were completed during the same period.

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Highlights

• Apart from a rise in new listings, Toronto Metro’s housing market remained relatively stable in September.

• Both resale and rental market balances remain weak, with prices and rents continuing to decline.

• The condo sector stands out as a sector to watch.

• Canada’s population growth slowed to 389,000, though annual comparisons mask important dynamics.

• Ontario experienced an unprecedented slowdown in population growth.

• New home sales and housing starts continue to fall, while completions remain strong.

• Housing affordability continues to improve and now deserves close attention.

• Important tailwinds and headwinds for Toronto Metro’s housing market.

Real Estate Market

In September, Toronto Metro’s real estate market remained relatively stable. New listings increased, while sales and active inventory stayed mostly unchanged compared to their 10-year averages.

Market balance indicators were mixed. Months of Inventory strengthened, but the Sales-to-New-Listings ratio weakened on the same basis.

Both average and median prices rose, driven by a higher share of luxury property sales. However, the benchmark price continued to decline.

Overall, prices are down 4–5% year over year and 21–25% below the peak. In real (inflation-adjusted) terms, prices have dropped 31% from the peak — a new record low.

A notable trend is the continued strengthening of the condo sector relative to the broader market.

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Highlights

• Toronto Metro market trends were mixed in August, with prices continuing to decline.

• Despite some improvement, housing affordability remains stretched.

• Toronto Metro rental market weakens, with further relief for renters likely ahead.

• Toronto Metro condo investment math struggles, especially for pre-sales.

• Permit data for temporary residents offers important clues for Canada’s future population growth.

• Macro data shows a mixed picture, with both weakness and stability.

• Is inflation making a comeback?

• Canada's policy interest rate expectations.

Real Estate Market

In August, Toronto Metro’s real estate market showed mixed signals, with sales, new listings and active inventory all declining relative to the 10-year averages.

As a result, both market indicators weakened on the same basis.

Nominal Month of Inventory indicator reached 5.3 - the highest level since 2009.

Prices continued to decline, driven by both market weakness and seasonality.

Toronto Metro real estate prices are now down 23% from the peak. Adjusted for inflation, they have fallen by 31%. This price correction has improved housing affordability, with mortgage payments on a typical property now requiring 49% of household income. While still significantly above the historical average, 30-year amortization brings affordability closer to it.

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Highlights

• Toronto Metro’s housing market is showing fresh signs of life as sales climb and inventory thins.

• Prices continued to decline, however, market balance strengthened.

• Toronto Metro’s rental market remains weak but stable, with rents edging down slightly.

• The construction industry in the Toronto Metro continues to cool down.

• Canada’s GDP is expected to nosedive, but there is an important caveat.

• Population growth continues to decline.

• There are signs of stability in recent Canadian macro data.

• A warning for potential homebuyers.

Real Estate Market

In July, Toronto Metro’s real estate market showed signs of strengthening, with sales continuing to rise, new listings holding steady, and active inventory declining relative to the 10-year average.

Both market balance indicators tightened but remained weak.

At the same time, all price metrics saw sharp declines. The benchmark price fell 1.4% from the previous month, while the average dropped 4.5% and the median 4.2%. Prices are now 21-24% below their peak values.

While summer is typically a quieter time for the real estate market, it can’t explain this move, since prices declined even after seasonal adjustment. These large shifts were partly due to a higher share of condo sales and a drop in luxury property purchases($2M+) compared to the previous month. Additionally, many Toronto Metro homes sold at the deepest discounts to list prices in two years, with larger seller concessions helping to drive market activity.

Resale active inventory began its seasonal decline in July, suggesting the 2025 peak may be behind us.

The condo sector slightly outperformed the overall market but remained weak.

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Highlights

• Toronto Metro’s resale market strengthened in June, but active inventory climbed to a new high.

• Home prices dropped again, now falling below 2021 levels.

• Rental market remains soft, even as seasonal trends temporarily lift rents.

• Toronto Metro housing affordability is stuck despite a 30% real price drop.

• Canada’s population growth is plunging, with Ontario seeing an unprecedented decline.

• The labour market is deteriorating, and the true weakness may be worse than official numbers suggest.

• There are signs of financial stress among builders and developers.

Real Estate Market

In June, sales activity in the Toronto Metro increased, while new listings and active inventory remained below their 10-year averages.

As a result, market balance indicators improved slightly on the same basis.

All price metrics declined in June, bringing values to a level slightly above those of 2021.

Nominal resale active inventory rose further to 31,603 units - the highest level since 1995, with June typically being the seasonal peak. This suggests that further increases in resale inventory may be more difficult to achieve in 2025, though still possible.

In contrast, rental inventory usually builds up after August, so its weak seasonality is still ahead. Combined resale and rental inventories reached 47,379 units and may increase further this year.

Overall, the amount of available inventory is becoming a concern. Toronto Metro’s rental market continued to weaken in June relative to the 10-year average.

Although rent prices increased, this is typical for the season. The average rent remains slightly below the 2022 level.

Extraordinary Housing Correction

The decline in house prices in June led to a modest improvement in housing affordability. Mortgage payments on a typical newly purchased property now require 50% of household income, down from 51% the previous month.

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Highlights

• Toronto Metro’s active listings continued to rise despite a high terminations and an uptick in sales activity.

• The rental market is softening, however, not all data sources align.

• How do Toronto rents compare to the rest of Canada?

• Three key trends are expected to significantly reduce Canada’s population growth in 2025. The target is estimated by the model.

• Who feels more financial pressure: Renters or Homeowners?

• Unemployment and mortgage arrears are on the rise.

• The Canadian economy is facing challenges in Q2-Q3 2025.

Real Estate Market

In May, there was a shift in the Toronto Metro’s real estate market, with sales, new listings, and active inventory all rising compared to the 10-year average.

This chart uses the new methodology introduced to address the issue highlighted in the previous newsletter (link). The number of new listings in May was the second-highest for that month since at least 1980, surpassed only by 2017. At the same time, listing terminations rose to their highest point since 1992, suggesting a significant amount of listing recycling. Despite that, active inventory continued to climb, surpassing 30,000 listings and reaching the highest levels since 1995. May typically marks the seasonal peak. Importantly, when adjusted for population growth, the current level of active inventory is still 31% lower than the 2008 peak.

Inventory, sales, and new listings all influence market balance, which improved slightly compared to the 10-year average but remained generally weak. The condo sector continued to underperform relative to the broader market.

Prices held steady, with most price metrics posting modest gains in May, largely due to seasonal factors and a reduced share of condo sales.

Last month, I highlighted changes related to the Toronto Regional Real Estate Board reporting (link). It’s now possible to compare the old data with the revised figures. The revisions are significant, for example, here’s how the seasonally adjusted benchmark price changed:

In this report and future releases, I’ll be using data based on the new methodology.

Rental Market

Toronto Metro’s rental market weakened in May, with the market balance falling further below the 10-year average.

Rent prices increased, largely driven by seasonal strength in low-rise house rentals. This trend typically peaks by August, so a few more months of relative strength would not be surprising.

Recent data from the Toronto Regional Real Estate Board revealed some interesting trends in the condo rental market. In Q1 2025, the number of leased condo units reached its highest level since at least 2012. This growth in leasing activity continues despite slower population growth.

Meanwhile, new condo rental listings declined in Q1, tightening the market. As a result, the latest market balance reading was the strongest for that quarter since at least 2012.

Read more

Highlights

• Toronto Metro’s real estate market remained weak but stable.

• The rental market continues to soften, improving affordability for renters.

• The new construction sector is slowing, though completions surged in March.

• In February, there was a notable drop in permits issued to temporary residents.

• Population growth decline: Ontario is in the spotlight again.

• Competition for permanent residence is heating up, with many temporary residents lacking a clear path to obtaining it.

Real Estate Market

In April, Toronto Metro’s real estate market was relatively stable. Both sales and new listings rose compared to the 10-year average, while active inventory declined slightly on the same basis.

This chart worked well in the past, but active inventory has now deviated so much from the 10-year average that comparing the two no longer offers an accurate picture of month-to-month changes. For example, there were 27,386 active listings in April, far above the 10-year average of 15,290. It's unrealistic to expect a market with 30,000 listings to move with the same magnitude as one with 15,000. Switching from relative to absolute comparisons reveals that active inventory has been increasing for four consecutive months.

That aligns with the raw data, where active inventory in April reached the highest level since 1996.

I'll explore better ways to present the data to continue delivering reliable market signals. In summary, April's key trends were:

• Sales activity increased, though still at the lowest April level since 1995 (excluding the pandemic).

• New listings rose, hovering near the historical average.

• Active inventory reached its highest April level since 1996.

The market balance remained weak, though it improved slightly relative to the 10-year average. On a seasonally adjusted basis, however, it deteriorated.

Here are the levels of the market balance indicators:

• Months of Inventory: Weakest April level since 1996.

• Sales-to-New Listings Ratio: Weakest for April since 1990.

This is an exceptionally soft market with prices typically declining 16-17% per year.

Prices were another confusing topic in April since the Toronto Regional Real Estate Board(TRREB) revised down their benchmark prices. It was part of a broader data revision related to the addition of new boards within the GTA. (link, see note). As a result, comparisons with historical pre-revised data are no longer valid. Using the old data would misleadingly suggest a 5.5% monthly price drop, which isn’t accurate.

For this newsletter, I’m using the old methodology for April and will switch to the new one next month when the whole revised data series is available. The full set of price metrics presents a mixed picture, suggesting that prices either held steady or declined slightly in April.

I was surprised to see such bearish media headlines about April’s data.

Yes, sales were down over 20% year-over-year, but the gap was even larger in prior months. That decline is hardly April's defining feature.

Don’t just take my word for it, TRREB’s official data showed growth in seasonally adjusted sales in April.

This month's update took longer, but I wanted to provide more clarity, especially given the mixed signals in the media and data revisions.

The trend of relative condo weakness continued, with that weakness deepening in recent months.

Read more

Highlights

• Toronto Metro sales remained exceptionally low in March

• Rents edged up, but Toronto Metro’s rental market continued to weaken

• New risks are emerging for the housing market

• Population growth is slowing — but is it slowing fast enough?

• An important angle on the impact of the population growth slowdown in Ontario and Toronto

• Housing affordability and investment appeal are showing signs of improvement

• Households face rising financial stress, despite strong wage growth

Real Estate Market

February saw a sharp decline in sales, pushing the market balance to its weakest level in decades. I suggested this could be partly due to harsh weather in the GTA (link). However, sales fell even further in March relative to the 10-year average, reaching the lowest level since 1998. This indicates that other factors, such as growing uncertainty or expectations of further price declines, may be at play.

New listings and active inventory remained relatively stable compared to the 10-year average.

Driven by lower sales, market balance indicators plunged to their weakest levels for this month since the 1990s.

Price metrics present a mixed picture but have remained relatively stable, hovering around 18–22% below peak levels.

Seasonal factors support that stability, but once those factors are excluded, underlying prices continue to gradually decline. This is an important shift in the market, which I flagged in the previous newsletter(link) and is worth paying attention to.

Toronto Metro’s rental market continued to weaken in March, with the market balance indicator falling further below the 10-year average.

While the average rent increased by 3% month-over-month, individual segments did not reflect similar gains.

The rental market weakness remains the main story for Toronto Metro, and I don’t see that changing for now.

New Risks

It’s becoming increasingly clear that the housing market in the Toronto Metro is facing a growing number of risks. The market was already quite weak at the beginning of March, but additional concerns emerged over the course of the month,

Read more

Highlights

• February recorded the lowest Toronto Metro sales for this month since 1995

• Record listing terminations prevented an inventory buildup

• The rental market weakened, with falling rent prices

• New construction sales hit record lows for the ninth consecutive month

• Population growth continues to slow, but permits issued to new non-permanent residents remain high

• Toronto vs. Canada: A tale of two macroeconomic stories

• Is Canada’s economy on track for a soft landing?

• The U.S.-Canada trade war could cause a temporary spike in inflation and leave lasting economic damage

Real Estate Market

One key development in the Toronto Metro real estate market in February was a decline in sales compared to the 10-year average. With 4,037 sales, February saw the fewest transactions for this month since 1995, when the population was significantly smaller. New listings also fell but remained close to the historical norm, while active inventory held steady.

Interestingly, Vancouver did not experience the same dynamics, as February sales were low but not unprecedented. This suggests that Toronto's sales collapse was likely driven primarily by local factors, such as bad weather, rather than national or global events.

The stability of the Toronto Metro’s active inventory was largely explained by a record number of listings terminated in February.

Weak sales pushed market balance to historic lows. February’s Months of Inventory reading was the weakest since 1996 (excluding 2009), and the Sales-to-New-Listing ratio was the lowest for February since 1990.

Despite this, all price metrics increased, however, this is misleading due to seasonal effects and a higher share of luxury sales.

Seasonally adjusted Average and Benchmark prices fell, with the latter hitting a new low.

I posted this chart in the previous newsletter (link), and notably, TRREB revised previous data downward. The trend of resilience appears to have broken. Given the weak market balance readings, prices should be declining at an annual rate of 9–13% (if the market balance remains at its current level for the entire year).

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Highlights

• Toronto Metro saw a sharp increase in new listings

• The market slightly cooled, but prices remained stable

• Toronto Metro’s rental market remains weak but is gradually strengthening

• Risks emerge for pre-construction investors in 2025

• New construction sales continue to decline, with housing starts following suit

• Construction employment faces potential risks

• Population growth inputs fell but remained elevated

• Mortgage rates declined, while the gap between fixed and variable rates narrowed

• Is a strong rebound in GDP per capita on the way?

• Potential tariff impacts pose challenges for central bankers

Real Estate Market

The key development in Toronto Metro’s real estate market in January was a surge in new listings, which far outpaced the rebound in sales. This trend is evident in the raw data and even more pronounced when compared to 10-year averages.

As a result, active inventory increased, and market balance indicators, though showing mixed trends, generally weakened compared to the 10-year average.

Prices remain very resilient, with virtually no change over the past 13 months.

This is a clear example of downside price stickiness and a reminder that statistical models can become highly inaccurate. Based on market balance trends, prices should be declining, yet that is not happening.

Rental Market

The Toronto Metro rental market continued to gradually strengthen in January relative to the 10-year average.

However, it remains weak overall, causing rent prices to fall further below 2022 levels. Over the past six years, condo rents have risen only 12% in total, roughly half the inflation rate over the same period.

This is welcome news for renters but a concerning trend for real estate investors, particularly in the pre-construction segment.

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It has become a yearly tradition to highlight the key developments and trends of the year. Here’s my list for 2024, with a special focus on the Toronto Metro area.

A Turning Point for Population Growth

Rapid population growth was one of the key trends in 2023, but in 2024, it tapered off and began to decline.

This shift was primarily driven by a decrease in non-permanent residents, influenced by a number of factors including stricter policies affecting international students and other temporary residents, a weakening economic environment, and a natural increase in the outflow of non-permanent residents. Population growth is expected to decline further, warranting close attention in 2025.

Labour Market Weakened in a Recessionary Manner

Speaking about the economic environment, the share of people permanently unemployed in Ontario increased rapidly in 2024 approaching the levels seen only during recessions.

Unemployment is considered permanent when it lasts for 27 weeks or more, representing a structural weakness in the labour market. This increase was primarily driven by youth and recent immigrants but became more widespread closer to year-end.

Pivotal Moment for Monetary Policy

As inflation continued to decline, in 2024, the Bank of Canada began normalizing its policy rate, moving it closer to the neutral range. However, the weak economic environment prompted a faster-than-usual pace of easing. Instead of the typical 0.25% reductions, the Bank of Canada implemented two 0.5% cuts last year.

Monetary policy easing wasn’t unique to Canada, as many central banks globally also began reducing interest rates in 2024.

A Decisive Moment for the Most Reliable Recession Indicator

Another notable development in 2024 was the un-inversion of the yield curve. The yield curve is inverted when long-term bond yields fall below short-term ones so the difference between those becomes negative. It is an important indicator because historically yield curve inversions were followed by recessions, especially in the US. It remained inverted throughout 2023 and part of 2024. However, by the end of the year, the inversion ended as 2-year bond yields dropped below 10-year yields.

More about yield curve inversions can be found here. It’s important to note, that while recessions do not always follow inversions, those events remain significant. The U.S. yield curve inversion also ended in 2024.

Toronto Real Estate Became More Attractive to Foreign Investors

When adjusted for inflation and converted to USD, Toronto Metro real estate prices in 2024 returned to levels last seen in 2017.

For foreign investors, this represents a 36% decline in real estate prices from their peak, making the market significantly more attractive.

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