Recovery in Sight, But Buyers Hold the Cards
- Mark
- Mar 26
- 3 min read
ECONOMIC SPOTLIGHT // Q1 2025
Focusing on Ontario and the Greater Toronto Area (GTA)
The Greater Toronto Area (GTA) kicked off 2025 with signs of renewed market activity. Lower borrowing costs and a surge in listings have reignited interest from buyers, but the market still leans in their favor.
Market Highlights:
- GTA home sales are projected to hit 76,000, a 12.4% increase over 2024.
- The average price in January reached $1,040,994, up 1.4% YoY.
- Listings jumped 48.6%, while the sales-to-new-listings ratio dipped below 40% — signaling a buyer’s market.
Detached homes are holding firm, but condos are facing pressure. With rising inventory and softer demand, condo prices dropped 2.4% year-over-year.
Across Ontario, the picture varies:
- Ottawa: +6.1% YoY price growth
- Hamilton: -4.8% decline
- Province-wide sales: Down 10% YoY
- Inventory: Highest level in 10+ years
Economic Outlook: Solid Growth with Unsettled Edges
Ontario’s economy continues on a steady, if cautious, growth path. Lower inflation is paving the way for rate cuts, but rising unemployment and global uncertainty are flashing yellow lights.
By the numbers:
- Ontario GDP: +2.1% forecasted for 2025
- Inflation: Expected to ease to 1.9%
- Unemployment: Rising to 7.5%, largely due to population growth outpacing job creation
- National GDP: +2.5% in Q1
Watch this space: Possible U.S. tariffs could hit Ontario’s manufacturing sector and ripple into other parts of the economy, including real estate.
Banking & Lending: Big Gains, New Caution
Canadian banks are showing resilience in Q1, thanks to strong performance and improving lending conditions.
- RBC reported $5.1B in profit, up 43% YoY.
- National Bank saw a 14% drop in net income due to higher credit loss provisions.
With the Bank of Canada cutting rates, lenders are more active again, especially in commercial real estate — a trend that could spill over positively into the residential market.
Tariff Watch: What U.S. Trade Tensions Could Do to Canadian Housing
The REXIG Read:
If new tariffs emerge from the U.S., we’re not just looking at a trade issue — we’re looking at a housing issue.
Construction materials like steel and aluminum could spike in cost, squeezing developers and pushing prices up for consumers. The ripple effect?
- Fewer new builds
- Higher prices on what’s available
- Pressure on rental inventory
- Boost for existing home values
Tariffs also create market hesitancy — and hesitation in real estate often leads to lost opportunities.
Mortgage Rate Forecast: Buyers, Take Note
With inflation cooling and the Bank of Canada eyeing rate cuts, mortgage shoppers may finally get some breathing room.
Forecast Highlights:
- A 0.25% cut is expected in April, with 0.50–0.75% total cuts likely in 2025
- Variable rates could dip to ~3.6% mid-year, and lower by year-end
- Fixed rates will likely hover around 3.89%–3.99%
The REXIG Read
This is a window of opportunity for buyers — especially those priced out in 2023–24. With rates easing and inventory climbing, the balance is back in their favour. But when confidence returns, competition will follow.
We’re heading into a year of cautious momentum. Rates are easing, inventory is rising, and market confidence is slowly rebuilding. But global uncertainty — tariffs, inflation, employment — could turn the tide quickly.
If you're buying, selling, or investing — now's the time to get strategic.
📬 Want help navigating this market shift?
Let’s talk about what these trends mean for your next move.
— The REXIG Team
Stay tuned for updates as we monitor these developments closely.
Sources
Disclaimer: The information provided in this blog post is for general informational purposes only and should not be construed as professional advice. REXIG Realty Investment Group does not guarantee the accuracy, completeness, or timeliness of the content. Readers are encouraged to seek professional advice tailored to their specific situation before making any real estate or investment decisions. REXIG Realty Investment Group is not responsible for any actions taken based on the information provided