Toronto Real Estate Market Watch

Presented by Your Home Sold Guaranteed Realty Team Pris Han Corp., Brokerage

1. Actual Demand for Housing and Supply of Housing

Toronto housing prices have always been a concern for Chinese Canadians. This is not only true for residents of the Greater Toronto Area, but also for newcomers to Canada and those who are considering emigrating. The price of housing is an important factor in choosing a city to settle in.

 As a special commodity, real estate has both use and investment properties. The price of a commodity is determined by supply and demand, and housing is no exception. The use attribute of real estate is that it can be lived in, so the actual demand for housing and the supply of housing in the Toronto area largely determines the price of housing in Toronto.

2. One Million Immigrants Plan

Ontario, Canada Immigration Entry Chart, 1992 - 2021


When it comes to housing demand, the most relevant issue is naturally the changing population. Canada's immigration policy has become increasingly aggressive in recent years, influenced by an aging population and a lack of labour. At the end of 2017, the Canadian government launched its "One Million Immigrants" plan, setting a target of introducing one million immigrants every three years, a significant increase of nearly 40% from the previous quota of more than 200,000 immigrants a year. By 2022, the new plan raised the three-year target to 1.3 million immigrants! The sheer size of the amount and the speed of the increase is astonishing. This makes Canada the fastest growing population among the G7. Thanks to this macro policy, Toronto, as Canada's largest city, has been the first to absorb new immigrants!

3. Toronto - the second fastest growing city in North America

The Greater Toronto Area not only attracts a large number of new immigrants to the area, but also a number of world-class institutions of higher learning that are home to many international students, thanks to its job opportunities, education, living environment and cultural diversity. This accelerating influx of "newcomers" has created a large demand for housing and is a major force in supporting and driving home prices in Toronto. In fact, in July 2021, a Ryerson University study reported that Toronto is the second fastest growing city in North America in terms of population.


It is very unfortunate that the amount of urban construction and new housing in Toronto has not kept pace with the rate at which new immigrants are settling in.

Chart New housing absorption rate (2019 absorption vs. Unabsorbed inventory )


As you can see in the chart, from 2019 to now, in the Toronto metro area, new homes sold (absorption) and unsold inventory are trending in the opposite direction, new homes sold are increasing while inventory is decreasing.

4. Ontario 1.5 Million Net New Homes in the Next 10 Years

Another report from the Smart Prosperity Institute, dated August 2022, with the current shortfall with the future arrival of new immigrants, states that Ontario will need a total of 1.5 million net new homes in the next 10 years, with 48% of the shortfall, or 720,000 units, coming from the Greater Toronto Area in downtown Toronto, York, Peel and Durham!

 Rapidly rising demand for housing combined with growing shortage of new housing supply is creating upward pressure on Toronto home prices over the medium to long term.


On the other hand, as an investment vehicle, Toronto real estate, especially condominiums, has also performed quite well in terms of investment returns. Whether it is a centrally located institution of higher learning such as the University of Toronto, Ontario University of Art and Design, or an upscale office district with financial institutions and high-tech companies, Toronto attracts a large number of students and white-collar workers to work, study and live in the city. With a stable and high quality tenant population, Toronto condominiums are favored by many investors. The price of Toronto condominiums is therefore strongly supported.

Note: The federal bill prohibiting foreigners from buying homes was passed and will come into effect on January 1, 2023. At that time, foreigners will not be able to purchase homes in Canada, except for certain exemptions. Contracts signed prior to the effective date of the Act will not be affected.

According to the Global Property Guide website, Toronto is one of the best choices among a range of large cities in Western countries in terms of rent to sales ratio (rent to house price).


5. Long term based on population, medium term based on land, and short term based on finance

Like all other cities, housing prices in Toronto are "long term based on population, medium term based on land, and short term based on finance". While Canada is considered to be sparsely populated, this is not the case in the Toronto area. The urban sprawl in the Greater Toronto Area has become so severe that it is considered a strain on the ecology, traffic and pollution. The crusade for land from nature has met with much opposition. Coupled with the constitutional protection of private property, private acquisition of land for rezoning is not an easy task. While the Greater Toronto Area government has repeatedly promised to speed up the process of granting residential building permits, officials are clearly overwhelmed by the need to increase land supply in a short period of time.

It is clear that the two more far-reaching and significant factors of population and land have done nothing to alleviate, or even exacerbate, housing prices in Toronto. The impact of financial policy was relatively short term, but a series of both heavy-handed and frequent interest rate hikes by the Bank of Canada from March 2022 after the epidemic did curb the frenzied rise in Toronto house prices during the epidemic.

Interestingly, if we stretch the observation period to 20 years, we see that: We see both a continued rise in Toronto home prices when interest rates rise and a fall in Toronto home prices when interest rates fall instead of rising. This should validate the above golden rule of "long term based on population, medium term based on land, and short term based on finance": house prices are ultimately determined by supply and demand. Whichever factor has the greatest impact on supply and demand, the more pronounced and long-term the reflection of that factor in Toronto house prices.


The Toronto Regional Real Estate Board (TRREB) publishes market updates every month, including Markham, Richmond Hill, and other suburban cities and Toronto home prices, as well as the number of sales, new listings, and total listings. This information is a good reflection of the recent market dynamics, supply and demand. I will summarize the main indicators through videos every month, share any interesting phenomena I see, and answer some of your most important questions. You are welcome to follow my YouTube channel Pris Han 多伦多安心卖房地产 or JinRi TouTiao Pris韩多伦多地产; XiaoHongShu Pris Han多伦多房产 (ID: TeamPrisRealty) to communicate and ask questions.