Is the GTA Real Estate Market Going to Crash?

PROBABLY NOT MORE.

I thought about making those three words the entirety of this blogpost, but I suppose that isn’t my style. You may have stumbled upon this post looking for answers and those three words wouldn’t have satisfied your curiosity.

But, if you’re a dedicated reader of this blog you will know that I answer this question frequently. Despite the incessant waves of bubble/crash stories from the mainstream media (who doesn’t like a good apocalyptic story?), there have only been two events since the 2008 financial crisis that could be categorized as a “crash”.

The first happened in 2017 after the Ontario government introduced a foreign buyer tax. And after one of the most insane spring markets ever seen, interest rates finally rose in March 2022 and prices were clawed back about 20%-25%.

In 2017, the market was at all-time highs by the next spring while as of the date of this post (winter 2025), the market continues to stay around the post-“crash” levels bringing it in line with around 2021 prices.

That may seem like a win for those betting against the housing market, but 2021 prices are still quite high and unaffordable for many people. Affordability is the key factor and overall we’re still not in a place that the average worker/single person can easily afford to purchase. And truthfully, that day likely may not ever happen again.

Top 5 Reasons There Likely Won’t be a GTA Real Estate Market Crash

For those looking for reasons why we won’t bottom out further from here, these are the top 5:

1. Not enough new homes are being built.

One, there isn’t the space to build out as much as needed. The Greenbelt decision was reversed by the Provincial government after huge blowback.

Two, many municipalities are turning towards condos for new homes and new funding sources. In some cases, developers can make way more money building a 600 unit condo than 25 townhomes on the same piece of land.

Three, with the market slowed down, developers are holding off building until margins make more sense.

2. There is still a lot of pent up demand.

You know how you say to yourself “who the hell can afford these places?”, well there are lots of people who can and the demand still doesn’t outweigh supply enough yet.

With interest rates continuing to fall, that demand that’s been on the sideline might prevent the market from reaching a full-blown buyer’s market.

3. Interest rates are coming down again.

After rising quicker than at any time in history from 2022 to 2023, interest rates stabilized in 2024 and have now reached below the level of inflation in late 2025. With recession fears in the air, they’re likely to come down further which should continue to keep demand healthy.

4. Sellers still aren’t desperate enough

The media reports swore to us that everyone who needed to renew in 2025 and soon to be 2026 would be unable to afford their mortgage after the next renewal.

But, with interest rates down that doesn’t seem to be happening.

Also, the amount of people who cannot afford to maintain their home is still staggeringly low in the GTA. Canadians seem to find a way.

While prices have certainly come down from the peak, they’re not crash-level pricing. People still have enough equity in their homes and are content to wait out the rebound.

5. Toronto & GTA Real Estate is Cheap

Yes, you read that right. This sounds crazy but for people from all over the world, the real estate here is still cheap. They see a young, blossoming city with affordable homes and condos they couldn’t dream about in other major cities around the globe. We’re also a safe, stable country to house money in the short and long term.

When Will it Crash?

We’ve been asking this question forever. There are times the market does crash, but it tends to happen after something has caused it to run up.

Now, that does catch some unfortunate people out. They’ve bought and the peak and it will take them many years to recover.

But a sustained, prolonged crash over several years bringing it below the initial point before the runup? We still haven’t seen that happen since the early 90s and the world is very different now.

Also remember that while Canadian household debt is at an all-time high, Canadians pay their mortgages. Our default rates are insanely low. Our “in arrears” rate are stupefying low as well. 

If you’ve been waiting on the sideline, you’re likely going to be waiting longer. And by the time another correction comes, the prices will have likely climbed to a point that it’s still unaffordable for you.

My advice? Either get in or get used to the way things are. If you’re not comfortable with it then get yourself locked into a nice rental, invest the savings in the stock market, HYSA or GIC and start enjoying your life rather than reading yet another story about the real estate market.

Fire away with questions/comments below or contact me directly with any questions.