Toronto Real Estate Market Update: March 2025 – Hesitation Before the Rebound?

The Toronto real estate landscape in March 2025 is drawing parallels to the uncertainty felt back in March 2020 during the onset of the global pandemic. This time, however, the market’s hesitation isn’t driven by health concerns, but by the ongoing global trade war and the anticipation surrounding the upcoming federal election in April. This caution has led to a delayed spring market surge, with many potential buyers opting to wait on the sidelines.

Market Snapshot: Sales Down, Listings Up

Here’s a quick look at the key market statistics for March 2025 compared to March 2024, according to the Toronto Regional Real Estate Board (TRREB):

• Sales Volume: Down by 23.1%, with 5,011 homes sold. Seasonally adjusted sales also dipped compared to February 2025.
• New Listings: Up significantly by 28.6%, reaching 17,263.
• Active Listings: An even sharper rise, up by 88.8%.
• Average Price: A slight decrease of 2.5%.

A Tale of Two Markets: Condos vs. Houses

Interestingly, the market isn’t uniform across all property types. While the overall market shows hesitation, certain segments are experiencing different dynamics:

• Condo Townhomes, Semi-Detached, and Freehold Homes: These property types continue to attract the most interest. In some Toronto neighbourhoods, the arrival of nicer weather has even led to increased showings and multiple offers.
• Condo Market (Smaller, Investor-Owned Units): This segment remains subdued and is currently favouring buyers.

Rental Market: Opportunities for Tenants and First-Time Buyers?

The rental market is also undergoing notable changes:

• Falling Rents & Rising Vacancies: Rental vacancy rates have climbed to roughly 2.7%. Rents for studios and smaller units in Toronto proper have seen decreases of 5-6%. One-bedroom units saw a 0.3% month-over-month decrease and are down 2.4% year-over-year. Many landlords are choosing not to increase rents on existing leases.
• Investor Activity: A record 39% of Ontario condos are investor-owned. The decline in rental income might push some investors to sell, potentially creating a short-term window of opportunity for first-time buyers facing affordability challenges.
• Affordability Shift: While rents are falling in central Toronto, more affordable cities outside the GTA have seen slight rent increases as people migrate from higher-cost areas.

Looking Ahead: A Window of Opportunity?

Despite the current slowdown, the report suggests a potential rebound:

• Interest Rate Hopes: An interest rate announcement is expected on April 16, with predictions of a potential cut of 0.25% to 0.50%. Any decrease could boost buyer activity.
• Anticipated Rebound: Similar to the post-pandemic recovery, confidence is expected to return once the election passes and trade tensions ease, potentially leading to renewed demand in a delayed spring market.
• First-Time Buyer Opportunity: All signs point towards a significant window of opportunity for first-time buyers over the next six months, particularly if investor-owned condos become available due to falling rents. However, this improved affordability might be temporary as market absorption is expected to strengthen.

In summary, while March 2025 showed market hesitation influenced by external economic and political factors, underlying trends and potential interest rate cuts suggest opportunities may be emerging, especially for first-time buyers and renters in Toronto. The coming months will be crucial in determining the market’s direction post-election.