Plus: Why Houses Are Set to Shine First—and Why Waiting on Your Condo Might Cost You
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Quick Takeaways (TL;DR)
- Houses are likely to see a boost this spring (February–March 2025) and keep picking up momentum into 2026.
- Condos will take longer to bounce back due to extra inventory and fewer investors in the market.
- Interest rate cuts are expected to draw more buyers and investors back—but timing is crucial.
- Rental rates are down, making smaller condos (studios, junior 1-bedrooms) a tougher sell or investment.
- Waiting for your condo to rise in value? Houses may appreciate faster in the coming months, widening the upgrade gap.
If you’ve been dreaming of a bigger home for your growing family (or maybe you just want a yard for summer BBQs—or a puppy!), this post is for you. Let’s dig into the latest numbers, share some bold predictions, and outline a plan to help you make the most of 2025.
The 2024 Recap: A Wild Ride Worth Watching
According to the Toronto Regional Real Estate Board (TRREB), 2024 was a total transition year:
- Annual sales climbed to 67,610, up 2.6% from 65,877 in 2023.
- New listings jumped by 16.4% (166,121 in total), giving buyers plenty of options.
- Average price inched down just under 1% to $1,117,600 (from $1,126,263 in 2023).
- Condos saw steeper price drops, while single-family homes—like detached, semis, and townhouses—held up better.
Bottom line? We had ample supply, which helped keep price growth in check. If you owned a condo, you may have noticed selling at your ideal price was trickier than in years past.
2025: A Perfect Storm of Interest Rates and Inventory
- Interest Rates Are Dropping
- The Bank of Canada rolled out rate cuts in the second half of 2024, and more are likely on tap for 2025.
- Cheaper borrowing means buyers are bolder—a major plus for anyone looking to buy a house.
- Condos Have a Supply Hangover
- We’re still working through oversupply—especially for smaller condo units.
- Investors are on the sidelines (for now) thanks to lower rental rates, so the financials just aren’t as appealing yet.
- Houses Are in the Driver’s Seat
- There weren’t as many single-family homes flooding the market in 2024, so their prices remained relatively stable.
- With interest rates heading down, expect houses to heat up first.
Why Houses Will Catch Fire First (Think February/March 2025)
- Pent-Up Demand: Families have been waiting for the right moment. Lower interest rates mean monthly payments feel more manageable, so they’ll be jumping on well-priced houses.
- Tighter Supply: There are fewer single-family homes available compared to condos, so they’ll likely see price gains sooner.
- Lifestyle Upgrade: A two-bedroom condo might work for a while—but families often crave extra space, privacy, and a patch of grass for the kids (or, yes, the puppy).
When a hot property hits the market, the most prepared buyers will move lightning-fast. Don’t be surprised if “For Sale” signs turn into “Sold” in the blink of an eye.
When Will Condos Catch a Break?
Don’t fret, condo owners—your time will come:
- As House Prices Rise: Once single-family homes become too pricey for some buyers, they’ll pivot to larger condo units.
- Investors Return: Further interest rate cuts could lure investors back to snatch up 1+den or 2-bedroom condos.
- 2026 Outlook: By 2026, we should see much of the extra condo inventory absorbed, which can fuel a decent price rebound.
But… What About Smaller Condos?
- ROI Concerns: With rents down, studios and junior 1-beds don’t pencil out as easily for investors.
- Lifestyle Shifts: More people need space for a home office or a growing family, so micro-units may sit longer.
Dreaming of the condo next year? Dive into these must-read blogs packed with insider secrets to help you buy smarter and move with confidence.
- What to Do If Your Toronto Condo Isn’t Selling: Understanding the Market and Your Options
- Should You Sell Your Toronto Condo Now? Here’s Why the Answer Might Surprise You
- Is Now the Right Time to Buy A Home in Toronto?
Why Waiting on Your Condo Could Cost You More
Many condo owners think, “I’ll just wait for my condo’s value to rebound before I buy a house.” But here’s the catch:
- Houses are expected to appreciate faster in the next few months.
- By the time your condo inches up, that dream house could be up even more, making the gap between them even wider.
If you plan on upgrading eventually, it might be smarter to pull the trigger sooner rather than later, so you’re not chasing an ever-rising price tag on single-family homes.
Action Steps for Sellers and Buyers
- House Sellers: Early 2025 could be your sweet spot. Spruce up your home, stage it to impress, and prepare for motivated buyers.
- Condo Sellers: If your ultimate goal is a bigger place, consider listing your condo before the spring surge. A well-presented unit, especially with two bedrooms, can still catch a good offer.
- House Buyers: Get pre-approved now. If you wait until everybody else jumps in, you might miss out on the best deals.
- Investors: Keep a keen eye on further rate cuts. Once the math works in your favor, hop in before everyone else does.
Pro Tips for Navigating Early 2025
- Stay Informed: TRREB’s Market Outlook & Year in Review (due in February) is your crystal ball.
- Be Realistic on Pricing: Especially if you’re selling a smaller condo. Competitive pricing could be the difference between a quick sale and months on the market.
- Think Long-Term: A slight drop in your condo’s current value might be worth it if you secure a house that could see bigger gains ahead.
- Know Your Numbers: Whether buying or selling, have a clear budget. Don’t underestimate closing costs, moving expenses, or renovation budgets if you’re upsizing.
The Bottom Line
2024 was a year of market shifts, and 2025 is shaping up to be a huge window of opportunity—especially for anyone looking to jump from a condo into a single-family home. Houses seem poised to take off first, and waiting around for your condo’s value to climb might leave you chasing an even pricier house down the road.
Wondering if you should wait or dive in? The best strategy is to watch those interest rates, stay on top of new market data, and be ready to make your move. If you prepare now, you’ll be ready to pounce on those early 2025 deals—before everyone else catches on.
Need an Expert Game Plan?
At Homeplicity Realty Group at Keller Williams, we’re here to help you navigate the twists and turns of the downtown Toronto market. Whether you’re thinking of selling your condo or scouting for that perfect house, reach out today and let’s set you up with a strategy that makes the most sense for your goals.
