Toronto Home Prices & Sales Trends: The Truth About January 2025

Key Takeaways for Buyers & Sellers from Toronto’s January 2025 Market Report

As we enter 2025, the Toronto real estate market is already showing signs of complexity, resilience, and shifting dynamics. The latest data from January provides us with a fresh look at trends across asset types, market conditions, and buyer sentiment. With economic uncertainty, global challenges, and evolving government policies, the question on everyone’s mind is: Where are we heading next?

Breaking Down The Numbers

1. Market Performance by Home Type

Toronto’s 416 region is witnessing notable shifts across detached, semi-detached, townhomes, and condo apartments. Let’s break down what the latest stats reveal:

• Detached Homes: The average price is $1,579,386, reflecting a modest 1.0% year-over-year increase. Sales volume has climbed by 3.8%, indicating steady demand despite broader economic undercertainties.
• Semi-Detached Homes: This segment saw a 3.7% price decline but a 25.7% surge in sales volume. This uptick is primarily attributed to recent government policy changes allowing higher mortgage borrowing limits, bringing more buyers into this price bracket.
• Townhomes: The strongest performer in price growth, townhomes saw a 5.1% increase in average price, with 15.7% more sales than in January 2024.
• Condo Apartments: The condo market remains soft, with prices down 2.4% year-over-year and sales voluming dropping by 14.5%. This confirms a continued disconnect between supply and demand, with an oversaturation of inventory keeping prices suppressed.

See the trends for yourself! Watch our market report video for key takaways on pricing, inventory, and buyer sentiment.

2. A Market in Transition: Transactions, Listings & Pricing

Looking at the bigger picture, the entire market, including all home types, saw a 7.9% decline in total transactions, while new listings surged by a massive 48.6%. This influx of inventory, combined with slowing transactions, is increasing market competition among sellers.

• Active Listings: Up 70.2% year-over-year, reflecting a significant shift toward a buyer’s market in certain segments.
• Average Price: Despite market volatility, prices rose 1.5% year-over-year, suggesting resilience in key asset classes.
• Days on Market: Holding steady at 37 days, showing no major change in how quickly properties are selling despite increased inventory.

3. The Absorption Rate: Are We In a Buyer’s or Seller’s Market?

The absorption rate, calculated as active listings divided by monthly transactions, is a key metric to gauge market health. January 2025 reports an absorption rate of 4.36 months, positioning Toronto in a balanced market (typically 4-6months of inventory). However, the reality is more nuanced:

• The low-rise market (detached, semi-detached, townhomes) is moving quickly with inventory levels below four months, signalling a seller’s market.
• The condo market, by contrast, has surpassed six months of supply, indicating a buyer’s market with weaker demand and growing inventory levels.
• For context, Manhattan’s real estate market currently sits at 7.8 months of supply, with properties spending an average of 188 days on the market, significantly slower than Toronto’s current pace.

4. Historical Perspective: Where We Stand vs. Pre-Pandemic Market Conditions

Comparing January 2025 to January 2020 (pre-pandemic) highlights a fascinating transformation:

• Detached home sales have fallen 16.3%, while semi-detached sales are up 25.2% – further reinforcing the increased demand for more affordable freehold homes.
• Condo sales are down 25.5%, while active condo listings have skyrocketed 278% over five years.
• Row houses, a relatively more minor segment, have seen a 33.9% drop in sales, but active listings are up 167%, showcasing stagnation in this market segment.

5. What’s Driving Semi-Detached Market Growth?

One of the most compelling trends in early 2025 is increasing demand for semi-detached homes. Several factors contributed to this surge:

• The increase in insured mortgage limits from $1M to $1.5M has expanded access for buyers who previously couldn’t afford freehold homes.
• Longer amortization periods (now up to 30 years for insured mortgages) have eased monthly payment burdens, bringing more buyers into the $1.2M-$1.4M range.
• Tight supply in desirable neighbourhoods means competition is fierce, and buyers are now forced to act quickly when quality semi-detached properties hit the market.

6. The Condo Conundrum: Oversupply & Buyer Hesitation

If there’s one part of Toronto’s market struggling the most, it’s the condo segment. The surge in active listings and a decline in sales volume tell a straightforward story:

• Investor-owned condos, many of which are cash-flow negative, are sitting on the market longer, with reluctant sellers holding out for better conditions.
• Tenanted units are proving difficult to move, as many buyers prefer vacant properties for immediate occupancy.
• Buyer psychology has shifted – purchasers prioritize livability, favouring units with better layouts, more extensive square footage, and desirable locations over entry-level investor-focused units.

7. Where Do We Go From Here?

While early 2025 data reveals a mixed market, we anticipate the following trends in the months ahead:

• Semi-detached homes will remain highly competitive, while buyers scrambling for limited supply.
• Condo inventory will continue to rise, keeping prices relatively flat or slightly declining.
• Detached homes will hold steady, with marginal price appreciation due to sustained demand from well-capitalized buyers.
• Interest rate cuts could shift momentum – as borrowing becomes more affordable, we may see renewed demand in lagging segments later in the year.

For those looking to buy or sell, understanding these micro-market shifts is critical. The Toronto real estate landscape is evolving, and strategy matters more than ever. If you’re thinking about making a move in 2025, reach out to our team for a tailored approach based on the latest market insights and our tenured experience in this high-velocity marketplace!

Contact Fox Marin, Toronto’s downtown luxury real estate brokerage, today to learn more about the advantages of hiring a quality team!

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Kori Marin is a Toronto Broker & Managing Partner at Fox Marin Associates. For high-energy real estate aficionado Kori Marin, a well-lived life is achieved by maintaining an “all-in” attitude that realizes every last ounce of one’s full potential. This mindset has driven successful results in every aspect of her life – from her corporate sales and account management experience to her international travels to her years of fitness training and leadership – and is the hallmark of the exceptional work that she does on behalf of her clients in the residential real estate sector in downtown Toronto.