An Overview of Ontario's Housing Market in 2024

In this initial section of the report we will review Ontario transfer volumes at a high level. Over the past decade, 2023 had the lowest transaction rates, and 2024 only improved marginally. (Figure 1A). In the last ten years, the Ontario market very consistently had 75% of transfers coming from non-condo properties and only 25% from condo properties. When looking at the year-over-year change (Figure 1B) the two property types trend fairly closely together, however a divergence appeared in 2024 when there was a 10% lift in condo properties, while non-condo property transactions were flat.

When we look at the same set of data with a particular focus on Toronto, a slightly different story emerges. Toronto’s market differs from Ontario’s in the breakdown of property transfers, as 60% of the Toronto transfers come from condo properties and only 40% come from non-condo properties. There have also been multiple years with a divergence of the year-over-year change of the two property types in Toronto that isn’t seen in Ontario’s market as a whole. In 2024, Toronto condos experienced a fairly large lift of 20% year-over-year, while the non-condo space had a marginal increase of 4%, which seems to contrast news headlines suggesting a deterioration in the Toronto condo market.

To further explore the discrepancy between our data and news headlines, we segmented Toronto condo transfers into resales and new builds. In 2024, resale activity was at the lowest level seen in the past 10 years, which correlates to what has been reported in the market (Figure 3A). However, new build condo transfer volumes were 78% higher in 2024 compared to 2023 (Figure 3B). It is important to note that Ontario’s Land Registry data recognizes new builds only when the unit is ready for occupancy, even if it was pre-sold years before. This flood of about 15,000 new condo properties that became available in 2024 was an important piece of data in order to fully understand the condo market and perhaps contributed to the low volume of resale in the year.

We will start this section of the report by looking at how each of the buyer segments in Ontario participate in the market and what share they have of the total market (Figure 5). Multi-property owners’ share of transfer volumes in Ontario has increased over time, and for the last couple of years they have been the biggest segment, representing about a quarter of all transfers.

First-time homebuyers have always been a stable and strong segment, consistently accounting for 20% to 25% of the transfer volume in Ontario. Recently, their share of the market dipped in 2022 after interest rates started to increase, but has  since recovered with the recent rate cuts.

In absolute terms, life event transactions have remained fairly stable over time, but fluctuates as a share of volume due to prevailing market conditions. Over the past couple of years, overall transfer volumes have been low, which makes it appear that life events are taking up a larger share in the market.

The other segment has been in constant decline since 2011. This segment’s volumes dipped during the COVID-19 pandemic and have remained fairly flat into 2024.

Lastly, movers have historically been one of the smallest segments, although they do generate a large portion of news headlines. Activity among this segment has dipped since interest rates started to increase in 2022 and have yet to recover despite recent interest rate cuts.  This suggests that the mover segment continue to stand on the sidelines until market conditions stabilize.

When we review transfer volumes by buyer segments in relation to property types, it appears that there is a preference for condo versus non-condo properties by certain segments. Condo transfers are dominated by multi-property owners (Figure 6A), and in 2024, this segment purchased one in three condos in Ontario. First-time homebuyers account for about a quarter of the condo market, which speaks to the relative affordability of condo versus non-condo properties in Ontario. Movers on the other hand, have low participation in the condo market.

Transfer volumes of non-condo properties are much more balanced among all buyer segments (Figure 6B), and movers account for more volume in this market compared to the condo space.

The escalation of home prices in Ontario over the past few years is well-known and has tested the spending limits of each Ontario buyer segment differently. In 2011, all buyer segments were spending within a very tight price band with first-time homebuyers spending roughly $300,000 on average at the lower end of the band and movers spending on average $420,000 at the top of the band (Figure 8A). Over time, while first-time homebuyers have remained at the bottom of the band and movers have stayed at the top, the gap has widened significantly. Movers reached their peak average purchase price of just over $1 million in 2022, which in 2024 had declined 10% to $930,000. These increases over time are very significant as the compound annual growth rate (CAGR) of Ontario movers was about 6.4% and 6.6% for first-time homebuyers.

We observe a slightly different pattern as we analyze the data specific to Toronto non-condos (Figure 8B). The multi-property owner, other and mover segments are all spending in the same price range and over time have escalated at the same rate. First-time homebuyers on the other hand are still spending the least with less purchasing power. In comparison, in 2011, first-time homebuyers were spending on average about $500,000 which increased to $1.3 million in 2024, while movers saw an increase of over $1 million from $730,000 in 2011 to $1.75 million in 2024. These escalations represent a CAGR of 6.9% for movers and 7.6% for first-time homebuyers.

As mentioned earlier in this report, multi-property owners are the largest buyer segment in Ontario and we’ll dig a bit deeper into their activity in this section. Figure 9 outlines the number of properties held in the portfolios of multi-property owners. As of December 31, 2024, 55% of multi-property owners have two properties, followed by 20% who have three properties, which suggests that the vast majority of multi-property owners are “passive” owners as opposed to those who are leveraging their real estate portfolio for active income. Only 7.2% of multi-property owners own 11 or more properties, which has declined from 13% in April 2022, suggesting active reduction in portfolio sizes since the series of interest rate increases that began in early 2022.

To further analyze multi-property owners in Ontario, we segmented Toronto condos these buyers into two sub-groups: new and existing. Existing multi-property owners transactions are purchases by those who already owned more than one property, while new multi-property owners are transactions by those where the purchase represented their second property.

Over the past ten years, new multi-property owner purchases account for 70% of all multi-property owner transfer activity, with only 30% coming from existing multi-property owners, which indicates that new buyers are flooding the market to acquire additional properties.

Both existing and new multi-property owners experienced significant growth in Toronto in 2024 with 38% and 22% respectively (Figures 10A and 10B). A distant second in terms of the number of transactions was York Region, although this region experienced a decline year-over-year from 2023 to 2024. The next two largest markets for multi-property owners were Peel and Halton which both experienced growth in 2024. Wentworth and Waterloo both experienced significant year-over-year declines from 2023 to 2024 amongst multi-property owners.

When analyzing the multi-property owner segment, we wanted to further profile this buyer type by analyzing whether they are purchasing in groups or on their own.  As would be expected, the majority of multi-property owner purchases are made with two parties, whether they are new or existing MPOs (Figures 11A and 11B). To note, Teranet had previously studied the ages of these purchasing groups and found that the ages of the buyers in a two-party group are quite close together, indicating that these are not purchasing groups spanning multi-generations but are likely couples purchasing together.

Surprisingly, the second biggest group of multi-property owners are those purchasing properties on their own. In 2024, both existing and new multi-property owners purchasing solo experienced significant year over year growth of 12.5% and 5.4%, respectively.

In this section of the report we will focus on trends amongst sellers in Ontario. The first area of analysis we will focus on is turnover rate, which we measure through holding periods. Longer holding periods will lead to lower turnover of the housing stock and transactions overall.  Teranet calculates holding period at the time of a sale and look back to see how long the homeowner held onto their property up to the point of sale. A trend has clearly emerged as we observe holding periods increase for all property types over time, but especially in the last three years.  In 2015 the average holding period for condo properties was just under seven years (Figure 15A), but by the end of 2024 this had increased to over eight years. The average holding period for non-condos in 2015 was 11 years with an increase to 12.5 years at the end of 2024. The Toronto non-condo market is particularly interesting as the average holding period for these properties in 2015 was 13.8 years, but by the end of 2024 this had increased to 17.8 years.

When looking at the average holding period by region from 2015 to 2024, Toronto is one of the longest in Ontario (Figure 15B), while areas surrounding Toronto such as York and Peel are shorter.  This data seem to correlate with the idea that due to the lack of affordability in Toronto, many choose to renovate their existing property as opposed to moving to a new one within the same area to meet their evolving housing needs.

In these tumultuous market conditions such as those we experienced during the pandemic to now, we analyze properties that sold at loss to evaluate homeowner stress. Historically, the rate of loss in Ontario has been between 2% and 4%. However, properties that were purchased since 2022 and sold subsequently are showing very high rates of loss; One in four properties purchased in 2022 and sold in 2024 were sold at a loss.

In analyzing rates of loss from a regional perspective, we observe that Toronto fared better than most other Ontario regions but still saw that 15.8% of properties that were purchased in the years 2022 and 2023 and sold subsequently registered a loss. In the GTA, Peel had the highest rates of loss at 22%.  Many of the “cottage country” regions north of the GTA experienced rates of loss in excess of 20%.  Across Ontario, the median loss for properties purchased in 2022 and 2023 and then sold subsequently was $45,000. In the GTA the median loss was even higher at $56,000. Muskoka experienced a significant median loss of $240,000, however, the volume of transactions was relatively low.

To dig even deeper into this trend we analyzed whether certain value ranges of properties were more prone to selling at a loss than others. Properties across all value ranges purchased in 2022 and sold subsequently show elevated rates of loss, in particular those in the $3 million to $5 million range, although the volume of transactions in this category was relatively low. However, the smaller value range was not immune to loss as one in four properties valued between $500,000 and $1 million that were purchased in 2022 and sold in 2024 sold at a loss.