Toronto Luxury Market is Booming, and Higher Borrowing Costs Offset Lower Home Prices

This week’s top real estate stories.

By Jared Lindzon | 2 minute read

Every Friday, Wahi brings you the most important real estate stories from the past week. 

A Strong Market for The 1% 

Toronto’s housing market is booming, at least among homes with a 7-figure price tag. According to Engel & Völkers’ 2025 Mid-Year Luxury Real Estate Market Report, sales of homes worth $10 million or more in Toronto more than doubled over the last year. The ultra-luxury category also saw a jump in value, averaging $14.8 million in 2025, up a cool million from last year. The lowly $1 to $4 million range, meanwhile, faced slower movement. Vancouver homes priced between $1 and $2 million also saw a notable 4% jump, while Montreal sales over $4 million increased 69% since last year. 

The Market Slump Goes into Extra Innings  

The longer President Trump drags his feet on a trade deal with Canada, the further it will pull down the country’s housing market. That’s according to Oxford Economics, which warns that the housing market slump could extend into 2026 unless a deal with the U.S. is reached before then. They suggest the uncertainty of our current trade policy limbo is making for higher borrowing costs and weaker consumer confidence, keeping buyers on the sidelines. The global economic forecaster also suggests slumping home construction will result in a more competitive market in the years ahead.

Higher Borrowing Costs Take a Bite out of Price Declines  

Buyers can’t win in Canada’s housing market, as higher borrowing costs offset lower home prices. According to RateHub.ca’s latest Affordability Report, buying conditions declined in 12 of the country’s 13 major markets last month. The report finds Canadians now need to earn nearly $2,000 more than last month to afford average homes in St. John’s, Fredericton, and Ottawa, where both home prices and mortgage costs have increased. Steeper borrowing costs have also offset housing price declines in Victoria, Vancouver, Calgary, Montreal and Hamilton. The only market that got more affordable was Toronto, thanks to a $17,700 drop in home prices.

Toronto Sales Traffic Stuck Behind a Major Condo Crash

Call the paramedics, because Toronto’s condo market crash has gone from fender bender to multi-car pileup. According to the Toronto Star, 21 condo projects have been cancelled across the GTHA since early 2024, as inventory reaches a record high. Nearly 2,500 new units were added to the market this quarter, up 102% from last year and five times 2023. Meanwhile, sales flew past 30-year record lows dropping 10% in the second quarter after a 69% slump in Q1. Experts say nothing short of a major drop in interest rates and another 10% drop in prices will clear the wreckage.

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