Canada’s Real Estate Titans – The Rising Demand in Major Urban Hubs
We are going to say it, “An absolutely eventful closeout to 2024 – real estate-wise”! Almost all of the Canadian housing market saw really great numbers in the last quarter of 2024, attributed to different factors. As such, the Canadian real estate market is as diverse as its vast geography, with each region offering unique opportunities and challenges. Among the country’s many vibrant markets, three cities and their respective surrounding areas have prominently stood out as the central pillars shaping the real estate landscape: Toronto (Greater Toronto Area – GTA), Vancouver (Greater Vancouver Area – GVA), and Calgary (Calgary Metropolitan Region – CMR). These metropolitan hubs are not only economic and cultural powerhouses but also key drivers of housing trends and investment activities.
In this article, we delve into what makes these cities significant for real estate, examine their performance in December 2024, and explore the rising importance of secondary cities across the nation.
Toronto: The Financial Heart of Canada
Toronto, the capital of Ontario, is Canada’s largest city and the country’s financial and business hub. Home to the Toronto Stock Exchange (TSX) and headquarters of major corporations, the Greater Toronto Area (GTA) attracts professionals, immigrants, and students from around the globe. The city’s economic strength and cultural diversity make it a magnet for both residential and commercial real estate investment.
Key Real Estate Features:
Diverse Housing Options: Toronto offers everything from high-rise condominiums in downtown neighborhoods to detached homes in suburban areas.
High Rental Demand: With major universities, job opportunities, and an influx of immigrants, the GTA has one of the most competitive rental markets in Canada.
Infrastructure Development: Projects like the Ontario Line subway expansion continue to make the region more accessible, driving up property values.
December 2024 Performance
In December 2024, Toronto’s housing market showcased resilience despite rising interest rates. The average home price in the GTA was approximately CAD 1,070,000, reflecting an approximate 1.6% year-over-year decrease.
In December 2024, Toronto’s real estate market showcased diverse trends across property types. Detached homes averaged CAD 1,400,000, down about 1.3% YoY. Semi-detached homes saw strong demand, with prices rising 5.9% to CAD 1,088,543, while freehold townhouses experienced a 1.9% increase to CAD 1,015,505, driven by buyers seeking more affordable alternatives to detached properties. Meanwhile, condos averaged CAD 681,855, with a minimal 0.1% dip, indicating steady interest in urban living options.
The Sales-to-New-Listings Ratio (SNLR) stood at over 70%, indicating a solid seller’s market. Buyers continued to face limited options, which is a visible change from November 2024 where the market in GTA had been balanced.
Vancouver: The Gateway to the Pacific
Another significant real-estate hub – Vancouver’s stunning natural beauty, mild climate, and status as a global city make it one of the most desirable places to live in the world. The Greater Vancouver Area (GVA) is not only a residential hotspot but also a hotbed for international real estate investment, particularly from Asia.
Key Real Estate Features:
Luxury and International Appeal: Vancouver’s luxury real estate market is fueled by affluent global buyers.
Sustainability Leadership: The city’s focus on green building initiatives and urban densification has set it apart as an eco-friendly metropolis.
Limited Land Supply: Geographic constraints, including the Pacific Ocean and surrounding mountains, have led to persistently low inventory levels.
December 2024 Performance
Vancouver’s housing market continued to be one of the most competitive in Canada, with demand outstripping supply. In December 2024, the RE market highlighted varying trends across property types. The average home price increased by almost 2.5% YoY to approximately CAD 1,278,000. Sales activity soared, with around 1,800 homes sold — a 31.2% jump year over year. With an SNLR of a high 105%, the GVA also maintained its seller’s market status.
Detached homes averaged approximately CAD 2,130,000, up by almost 3% year-over-year. Attached homes saw a slight 1.5% decline, averaging around CAD 1,260,000, potentially reflecting affordability constraints or shifting buyer preferences. Meanwhile, condo apartments averaged CAD 810,000, up by almost 1% YoY, underscoring their continued urban appeal and status as the most accessible entry point for homeownership in the city.
Calgary: The Rising Star of Affordability
Calgary, located in Alberta, has emerged as a top destination for homebuyers seeking affordability without compromising on quality of life. Traditionally known as Canada’s energy capital, Calgary has diversified its economy with growth in technology, renewable energy, and other industries, making it a thriving hub for young families and professionals.
Calgary’s housing market outperformed expectations with a robust 12% year-over-year increase in average home prices, reaching over CAD 600k. While sales dipped by approximately 3%, the SNLR of over 105% solidifies Calgary’s position as a strong seller’s market. This high SNLR indicates that listings are being quickly absorbed, leaving little inventory.
In December 2024, Calgary’s real estate market demonstrated strong growth across all property types. Detached homes averaged at over CAD 795k, up by almost 9% year over year, driven by the city’s affordability and space advantages. Semi-detached homes experienced a significant 12% increase, averaging CAD 660k, reflecting rising interest in duplex living. Townhouses saw an over 7% rise to almost CAD 450k, while condo apartments led the market with a high 14% surge, reaching CAD 360k, showcasing Calgary’s growing appeal for urban and budget-conscious buyers.
To summarize:
In terms of affordability, Calgary stands out for its affordability and robust growth. With average home prices significantly lower than those in Vancouver and Toronto, Calgary continues to attract first-time buyers and investors. Vancouver reflects a premium market with high demand, driven by limited land availability and international interest. However, affordability challenges limit accessibility for many local buyers. Toronto presents a balanced picture, with diverse housing options catering to various buyer demographics. Its slight price decline suggests a market readjustment rather than a downturn.
So what’s the outlook for 2025
Although we are just starting with 2025, the trends from 2024 present an interesting outlook for 2025. With its affordability and growing economic opportunities, Calgary is poised for continued growth in 2025. However, inventory challenges may continue due to sustained demand and can further lead to price increases. The GVA’s high prices and demand are also likely to persist, although affordability concerns could push some buyers to consider surrounding areas. With new developments making their way to the area, the possibility of meeting high demand will hopefully be met out. In the GTA’s market, demand for semi-detached homes and townhouses is expected to remain strong, while condos will continue to appeal to urban dwellers.
The Rise of Secondary Cities
While Toronto, Vancouver, and Calgary dominate the real estate landscape, secondary cities across Canada are gaining momentum. Cities like Ottawa, Halifax, Edmonton, and Kelowna are increasingly attracting attention from buyers and investors alike. Here’s why:
Affordability: Secondary cities offer significantly lower home prices compared to the major metros, making them ideal for first-time buyers and retirees.
Lifestyle Appeal: Cities like Halifax and Kelowna boast scenic beauty, recreational opportunities, and a relaxed pace of life, attracting those seeking a better work-life balance.
Economic Diversification: Regions like Edmonton are benefiting from investments in technology, healthcare, and education, creating new job opportunities and spurring housing demand.
Remote Work: The rise of remote work has enabled more Canadians to relocate to smaller cities while maintaining their employment in larger urban centers.
Toronto, Vancouver, and Calgary remain the three prominent pillars of the Canadian real estate landscape, each with its own unique characteristics and market dynamics. Toronto’s economic strength and diverse housing options, Vancouver’s international appeal and luxury market, and Calgary’s affordability and growth potential make them indispensable to the country’s housing market.
However, as affordability challenges persist in these major metros, secondary cities are stepping into the spotlight, offering new opportunities for buyers and investors. The combination of strong fundamentals in the “pillars” and the rising prominence of secondary markets ensures that Canada’s real estate sector will continue to thrive in the years to come.
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