Market Insight for February 13

Entry-level pricing is making a noticeable return.

A larger portion of single-family homes are now coming to market for under $1 million, while more condominiums are trading below the $500,000 mark.

These properties present an attractive starting point for first-time buyers eager to enter the market at price levels not seen in years, as well as for those living outside the GTA who have resumed in-office work and are seeking a convenient pied-à-terre in the city to reduce lengthy commutes. They also appeal to buyers focused on long-term investment potential, though industry experts caution that broader economic headwinds are likely to continue weighing on consumer confidence, hindering potential price or sales growth in the year ahead.

At the height of the pandemic market, just 1.7 per cent of condominiums sold in the $400,000 to $499,999 range, according to the Toronto Regional Real Estate Board (TRREB). In January, that share of units ballooned to more than 26.9 per cent.

While larger two-and three-bedroom units continue to hold up relatively well, one-bedroom and studio suites are facing headwinds. Many of these smaller condos were originally purchased by pre-construction investors seeking more affordable rental units that would generate positive cash flow. However, as prices and rents softened and interest rates climbed, many investors have stepped back from purchasing pre-construction. The result has been an oversupply of compact units that typical end-users are less eager to purchase.

Seeing condos listed under $400,000 is no longer unusual. In downtown Toronto, 77 condos are currently listed below $400,000, with 315 available under $500,000, according to the Multiple Listing Service (MLS) as of Feb. 3.

With 1,500 units on the market, which will likely grow by the spring (typically the busiest time of year for real estate), the supply will continue to overpower the number of interested buyers. We might even see a few sales below $300,000 this year.

That said, condos in the $300,000 range are not being snapped up quickly. When interest does surface, it often comes from buyers outside the GTA — in markets such as London, Peterborough, or Barrie — who want a downtown base for occasional visits or a residence for a child attending university. For these purchasers, the focus is long-term appreciation rather than immediate rental income.

Real estate agents are also fielding inquiries from individuals responding to return-to-office mandates. With commutes becoming impractical, many are searching for a reasonably priced property closer to work.

While there’s interest from buyers, in the short term, the condominium market will continue to move at a slower pace and face ongoing challenges, creating a window of opportunity for purchasers to negotiate strongly and secure excellent value before conditions improve.

According to Urbanation (a market reporting firm for condominiums) the GTA’s new condo sales dropped significantly in 2025, with activity levels plunging to a 34-year low not seen since 1991. Investors (and their much-needed dollars) have virtually disappeared from the pre-construction equation. As a result, new home construction has come to a virtual halt in the GTA.

With high supply of inventory, lower prices, slower sales, and heightened negotiating power, there’s no denying that the GTA remains in the thick of a buyers’ market, one that will likely continue as the warmer weather rolls in. And it appears that sellers are coming to terms with that.