Toronto’s housing market is expected to experience a major surge in 2025, potentially making it Canada’s most expensive market, according to Royal LePage CEO Phil Soper. Despite recent market challenges, Soper believes Toronto is well-positioned for growth, even outpacing Vancouver’s traditionally high real estate costs in the coming months.
Soper attributes this anticipated boom to Toronto’s strong economic fundamentals, high incomes, and steady immigration, factors that continue to support demand for housing. As interest rates decline, Soper expects renewed activity in the city’s real estate market, especially as cities like Halifax, Montreal, and Calgary have already started their recovery from post-pandemic downturns. Toronto and Vancouver, he notes, will be among the last markets to see this resurgence.
“Toronto still offers relative affordability when compared to places like New York City,” Soper says, noting that the market’s current conditions reflect a period where prices remained stable even as incomes and savings rose.
Soper, who has led Royal LePage for 22 years, adds that immigration will continue to play a pivotal role in sustaining Canada’s real estate market. While Canada recently reduced its immigration targets, he expects this policy to rebound, driven by the country’s aging population and the need for skilled workers. Unlike other nations with declining populations, Canada’s immigration-friendly approach will help maintain its high homeownership rate among G20 countries, even if some Canadians are priced out of high-cost cities like Toronto.
Regarding Toronto’s condo market, Soper acknowledges it has slowed in recent years due to rising borrowing costs, which have kept first-time buyers on the sidelines. However, with anticipated rate cuts, he expects first-time buyers and investors to re-enter the market, which will lead to an increase in condo prices, likely by early 2025. Soper explains that these groups are essential to the condo market, as many new buyers rely on financing and prefer entry-level properties.
Soper further discusses the structural issues impacting Canada’s housing sector, noting that for years, new housing construction has lagged behind the country’s organic and immigration-driven demand. The average Canadian household size has decreased significantly, creating a need for more housing units, particularly for singles and couples. Building regulations and extended approval times also contribute to slower development rates, impacting housing availability.
With high demand expected to return, Soper anticipates that housing prices in Toronto will rise sharply. He acknowledges the concerns of young Canadians regarding affordability but notes that homeownership remains a strong cultural value, with many still aspiring to buy homes.
If Toronto does surpass Vancouver as the nation’s priciest real estate market, Soper expects homeownership rates to remain stable, with people willing to commute longer distances due to the rise of hybrid work models. While some may relocate to other regions for affordability, Soper believes that Toronto’s vibrancy will keep it a desirable place to live, even as prices rise.
Soper’s confidence in Toronto’s housing resilience is grounded in decades of observing market cycles. He emphasizes that while affordability challenges are real, the market has historically adapted to meet demand, and he anticipates similar solutions as Toronto’s growth continues into 2025.
