Is now the right time to buy your bigger family home, or downsize for retirement?
Should you take advantage of changing market conditions before mortgage rates rise further?
How will shifting employment trends and higher rental vacancies affect your decisions?
The Ontario real estate market is poised for a transformational year in 2025. Whether you’re a buyer, seller, or investor, understanding the key variables can help you make informed decisions in this unpredictable landscape. Here’s what you need to know:
1. Migration Patterns: Baby Boomers Leaving Ontario
Ontario continues to see large numbers of baby boomers migrating to other provinces like Alberta, British Columbia, and the Atlantic regions. These retirees are drawn by lower housing costs and more laid-back lifestyles, leaving behind larger family homes that increase inventory in Ontario. This trend may create opportunities for buyers, especially families seeking more space in suburban communities.
2. Rising Mortgage Rates: A Market Game-Changer
With over 40% of Canadian mortgages set for renewal in 2025, many homeowners currently enjoying rates of 1.5-2% will face significant increases to 3.5% or higher. These changes will have wide-ranging effects:
- Increased listings as some households struggle to manage higher payments.
- Higher vacancy rates in rental properties, forcing landlords to lower rents to attract tenants.
- A greater demand for affordable housing options, such as condos or rental units, as buyers reevaluate their budgets.
3. Downsizing and Inventory Growth: A Baby Boomer Shift
As baby boomers retire and look to downsize, Ontario’s real estate market will see a notable rise in listings of larger, detached homes. This influx could help balance supply and demand in previously tight markets while creating affordability for families looking to upgrade. For retirees, downsizing may provide financial flexibility and the opportunity to relocate to desirable regions.
4. Employment Market Uncertainty: Tariffs and Economic Shifts
Ontario’s economy remains sensitive to global factors, including potential U.S. tariffs that could disrupt manufacturing and exports. These economic shifts may:
- Impact employment in key industries, reducing consumer confidence.
- Shift demand away from higher-end properties and luxury housing.
- Encourage cautious behavior among buyers and investors.
5. Toronto Condo Market: Resilient and Unrelenting
Toronto’s condo market shows no signs of improving as we head into 2025. With rising mortgage rates and shifting investor sentiment, demand is weak. Contributing factors include:
- High vacancy rate and a need of investor to divest.
- Large amount of foreign money leaving Canada and Ontario.
- A steady pipeline of pre-construction projects continuing to fuel supply.
What’s Next for Your Real Estate Decisions?
With so many variables in play, 2025 offers both opportunities and challenges for those navigating the Ontario real estate market.
Is now the time to upgrade to your dream family home, buy a condo at a valued price, or downsize for retirement? Speaking with an advisor can provide clarity and confidence in making the right decision for your future.
The team at Harmer Wealth Management (www.harmerwealth.com) and The Harmer Group(www.theharmergroup.ca) are here to help. Schedule a complimentary consultation today to explore your options and make the most of the evolving market conditions.
Legal Disclaimer
This article is for informational purposes only and does not constitute real estate, financial, legal, or tax advice. Consult a qualified professional for advice tailored to your specific situation.