Nick's Market Notes:
SUMMER 2025
Unique homes and boutique condos continue to show their value. Distinctive, functional spaces in strong locations still sell well — often quickly — even in a tougher market (TRREB July: 416 detached prices down just -3.9% Y/Y vs. -6.4% in 905).
Turn-key, family-friendly homes in “no-brainer” neighbourhoods remain the gold standard. Buyers are paying for certainty and convenience.
The 416 is holding up better than the surrounding GTA. July data shows the gap widening (avg. price down less in the city than in the 905).
Newer subdivisions in the GTA, especially those driven by heavy investor speculation, are under pressure. ex. see my previous notes on the Barrie market (sales softness most pronounced in newer-build 905).
I expect peripheral markets could see depreciation pick up if interest rates remain elevated — one to watch, not a guarantee.
The recent build-up in 416 freehold listings isn’t a wave of perfect homes. Much of it is overpriced or tied to less desirable locations or layouts (active listings up; DOM higher for stale inventory).
The condo market continues to underperform (TRREB Q2 condo sales down Y/Y; listings up).
Investor-led, high-rise buildings with lots of small units are the weakest segment. More functional layouts in boutique and infill projects are performing noticeably better (end-user demand remains stronger for livable spaces).
Significant investor capital is still tied up in the condo market, limiting movement into other asset classes.
Stock markets at record highs provide a small confidence bump for some mortgage holders (S&P 500 & TSX both hit records recently)
Four-day back-to-office mandates at TD, Scotia, BMO, and RBC, effective this fall, may quietly help downtown 416 housing demand (all confirmed in late July press releases). Plus Ontario Public Service Employees in 2026, announced this week.
Although I am hearing anecdotally about many people choosing to sell and leave Toronto (and supported by many of my own current client's plans). Having said that, Toronto’s diverse job base makes it better positioned to ride out a recession than surrounding regions — a key reason I’m more bullish on the 416.
AAA downtown office leasing is showing signs of life, but with large-block vacancies still available, recovery will be uneven (downtown vacancy remains elevated despite Q2 leasing uptick)
Recreational markets remain soft as higher interest rates and tighter budgets weigh on demand. I expect this to continue.
Prime lakes and established towns within a reasonable commute are holding up better (Royal LePage Spring Outlook shows resilience in Muskoka & Kawarthas prime spots). More remote, 2.5+ hour drives are lagging badly.
Subdivisions remain a tough sell — buyers still gravitate toward community character and authenticity. I am most bearish on this market segment.
Current stand-out buying opportunities: fixers and estate sales, under-utilized vacant land, larger condos with functional layouts, and homes in neighbourhoods already mid-gentrification.
In leasing, larger, well-laid-out, and well-priced units remain competitive (TRREB rental data: larger suite segments still see shorter DOM).
Fundamentals matter more than ever — right location, right product, right prep, right price. The market isn’t bailing out mistakes.
August 15
Nick's Market Notes:
Winter 2025 - Reviewed
Flight to quality continues — family homes outperform in freehold. ✅ Right — TRREB 416 detached market outperformed 905; A+ family homes still sell quickly.
Toronto to outperform suburbs as in-office continues to return. ✅ Right — 416 price declines smaller than 905; bank RTO mandates will reinforce this.
Over time people will choose higher living expense & city life over brutal commute. Commute times not improving. ⚖️ To Be Determined — Demand patterns support this, but still anecdotal.
Real estate sales to be incremental to begin year, no big bounce. ✅ Right — Q1 & Q2 growth was steady but unspectacular.
Toronto condo market to slowly improve from lower rates & RTO, lifting overall 2025 market. ⚖️ To Be Determined — Rates eased slightly, but condo performance still lags.
Equity stuck in condos negative for some freehold segments. ✅ Right — Investor capital remains locked in condo market.
Toronto truly bounces back when the condo market bounces back. ⚖️ To Be Determined — 416 stability holding without condo rebound, but sustained growth needs it.
Pre-sale condo market to remain weak. ✅ Right — Sales/launches still slow; absorption rates low.
Record new completions in 2025 will weigh on condo market. ✅ Right — Added inventory pressure in investor-heavy towers.
More shakeout in cities that ran up during pandemic. ✅ Right — Peripheral/exurban markets have underperformed.
Opportunity in Fixers. ✅ Right — Softer demand has created room for value creation.
Plenty of duplex/triplex options as ROI remain low & stocks rip. ⚖️ To Be Determined — Availability is there; returns vary widely.
Value in smaller, tweener freehold homes until condo rebound. ✅ Right — Still more liquid than condos in many areas.
Rec market will still be weak; choose quality. ✅ Right — Prime lakes outperform; fringe areas lag.
Opportunity to buy well-run condos w/newer infrastructure. ✅ Right — Boutique, well-managed buildings are holding value better.
Market fragmentation makes mistakes easier — or easier to know when to strike. ✅ Right — Highly segmented; micro-trends dictate success.
Sellers need patience. ✅ Right — Longer DOM unless property is prime.
First time in 2+ years market may slowly come to sellers. ⚖️ To Be Determined — Pockets are heating up, but not across the board.
Job market uncertainty for management/director class may impact $1.75M–$2.25M. ⚖️ To Be Determined — Too early to call clear impact.
Uninsured mortgage rule to $1.5M not immediately impactful. ✅ Right — No short-term effect.
Medium–long term stokes sub-$1.5M market unnecessarily. ⚖️ To Be Determined — Too soon to measure.
Pockets of strength to sell; timing matters. ✅ Right — Certain product types/locations outperforming.
Cost inflation & belt tightening still shape decisions. ✅ Right — Buyers remain price-sensitive.
US deregulation could spur growth & pull Toronto along. ⚖️ To Be Determined — Early days; no clear spillover yet.
Sellers remain under pressure to sell before buying. ✅ Right — Few bridge buys; financing still costly.
Cosmetic renos matter for home prep. ✅ Right — Well-prepped homes are moving faster.
Targeted marketing to right cohort critical. ✅ Right — Still essential in a segmented market.
‘Bumpy ride’/‘Vibesession’ labels unhelpful. ⚖️ To Be Determined — Sentiment remains cautious.
Federal election won’t affect RE decisions. ✅ Right — So far, no impact.
Trump tariffs to be negotiated but possibly recessionary; big unknown pre-inauguration. ⚖️ To Be Determined — Policy impact unclear.
Originally sent January 18, 2025. Verdicts based on August 2025 data and trends.
