Toronto’s housing market is (mostly) frozen — but there are signs first-time buyers are back

More spacious condos suddenly became available in her price range; home ownership was finally in reach.

“Many condos sell for below asking price, interest rates have fallen, there’s very little competition and I was able to save enough money to put down 20 per cent by living in a rent-controlled building and having a strict budget,” said Tortolano, who began her search in December, just before the spring market.

While it’s still early days in the spring market, real estate experts interviewed by the Star all agree: the market is slow. Not only is it very muted compared the height of the market in 2021 and 2022, but it’s quiet by pre-pandemic standards.

Toronto-area homes sales hit a 25-year low in 2025 and even though sales increased annually in March by 1.7 per cent, they’re still well below March’s average sales numbers for the last 10 years.

But when the real estate market is down, it presents opportunities for some, experts said. 

Since the February 2022 peak, the average home price in the GTA has dropped 24 per cent. And interest rates have remained relatively steady (although fixed-rate mortgages are rising as oil prices soar). 

Toronto’s real estate generally remains unaffordable, but first-time homebuyers like Tortolano are emerging as the condo market continues to languish.

Larger condo units around 650 square feet are cropping up in the $500,000 range or less, which is an attractive option for entry-level buyers. 

It’s not enough to pull Toronto’s market out of its slump, but it’s a meaningful change that gives those previously priced out of the market a fighting chance. 

“Toronto’s real estate market is not off to a rolling start, but it’s warming up slowly,” said Amrit Walia, a Toronto-based real estate agent. “The biggest shift we’re seeing is in the entry-level property, especially for condos.”

‘Now they can actually afford more’ 

After looking for just one week, Tortolano bought her first condo. The one-bedroom apartment, located in the High Park-Swansea neighbourhood, had been on the market for more than a month with no competition when she put in her offer. 

“I ended up falling in love with the first unit I saw and went for it,” said Tortolano, who works in accounting project management.

“I did see many other units after that to make a more informed decision but I hired a realtor on a Friday, and the following Friday after that the sale agreement was already signed by myself and the seller.”

She closed on her property in February. 

In March, sales saw a slight boost compared to the same time last year, with condo and detached home purchases up 1.7 per cent and 5.2 per cent year over year, respectively. 

A growing number of condos are being listed for $500,000 or less and there are more freehold properties under $1 million.

Mortgage specialist Tuli Parubets said she’s seen an uptick in first-time homebuyers over the last several months booking appointments to get their mortgage pre-approved, after allowing pre-approvals from the last couple of years to expire. 

“Going into Christmas I saw more of an influx of first-time buyers coming through,” she said. 

Government incentives have helped, such as the federal government extending the amortization period to 30 years instead of the standard 25 years for first-time homebuyers, as well as allowing a less than 20 per cent down payment on a home that costs $1.5 million or less (it used to only apply for a home $1 million and under). 

“It’s (the incentives) doing wonders,” Parubets said. “Now they can actually afford more.” 

First-time buyers enter the freehold market 

Olivia Warner was born and raised in Toronto and is beginning to house hunt with her husband for their first home. The couple, professionals in their 30s, are looking for a freehold property that they can hopefully live in long term. 

“It feels like there’s more of just a chance for us to even get in the door,” said Warner.

“There’s not the same amount of stress as there was a few years ago.” 

She said they still don’t qualify for many listings, but it feels like “a more balanced time to be looking.” 

And there are neighbourhoods where freehold properties are under $1 million. 

“Right now I’m seeing young couples, first-time buyers who are getting into freehold market,” said Dariya Zinchenko, a Toronto-based real estate agent who works with many first-time homebuyers.

While the property might not be the ultimate dream home, young families can envision starting a family in the space, she added. 

Mississauga, Vaughan, Etobicoke and Toronto’s east end are areas where Zinchenko has seen freehold properties under $1 million, but the homes in Toronto at that price point likely need some renovations and upgrades.

However, central and west end Toronto is still expensive. 

In March, the top five neighbourhoods where homes went for over asking included Runnymede, Bloor West Village, Riverdale, Rouge Woods and Trinity Bellwoods, according to a recent report from Wahi Realty brokerage. 

A home in Trinity Bellwoods listed for $1.1 million sold for $1.5 million at the end of March after receiving 10 offers, indicating the right property in a sought-after location still garners a lot of attention, Parubets said.

Bigger condos are trading 

While slightly more condos are selling in Toronto this year compared to last, prices declined in C01 and C08 (both central downtown Toronto regions with neighbourhoods east and west of Yonge Street) by 7 per cent and 10 per cent respectively, over the past year.

“There’s a 60 per cent increase in sales under the price point of $500,000,” Walia said, adding that the mortgage costs for potential buyers are starting to become bearable. 

The average price of a GTA condo has dropped by more than 22 per cent since the 2022 peak. 

Shoebox condo units that were popular with investors still aren’t selling but one-bedroom-plus-den apartments at around 650 square feet sitting in the half-a-million-dollar range are a popular choice — a price point for the size that wasn’t available two years ago, he said. Two-bedroom condos are also sought-after but are more expensive in the $750,000 range, he added. 

So far, Walia said investors are nowhere to be seen among condo buyers, and all of his clients are people intending to live in the home.

Toronto real estate agent Sean Mayers said the majority of first-time homebuyers he’s working with are looking into condos, where there are “deals to be had.” 

“Buyers are getting condos for up to $60,000 less than they normally would,” he said. 

The market remains (mostly) stuck 

But even as interest from first-time buyers builds, many prospective buyers are still on the sidelines and the market remains quiet. 

“The economic uncertainty, joblessness, inflation, potential world wars, the stock market is down, there’s just a general sense of dread,” said Mayers, adding that buyers’ main concern with a large purchase is being saddled with mortgage payments and expenses as the real estate market gets worse. 

The Middle East conflict also has a ripple effect for the housing market because as oil prices soar bond yields increase, pushing up fixed-interest rate mortgages. 

“Oil prices don’t just impact the gas station,” said Walia. “It also changes affordability in housing prices and has some influence.” 

A recent report from CPA Canada said more than half of homeowners (55 per cent) plan to stay in their current home for the foreseeable future, while just 10 per cent are looking to upsize. Meanwhile, 61 per cent of homeowners looking to move are sidelined, either waiting for prices to improve or facing financial constraints to sell.

“The majority of sellers are hoping, wishing, dreaming that the spring market right now will change and a flood of homebuyers will come online and compete and raise the offer prices,” said Mayers.

“The reality is that’s not the case. And so a number of home sellers, condo or house, still haven’t quite come to terms with where market prices are today.”