On the heels of a strong fourth quarter, luxury homes in the Greater Toronto real estate market appeared poised for substantial growth in 2025. High-end buyers were looking forward to further rate cuts and sellers were anticipating an increase in traffic as pent-up demand was unleashed. Then came the threat of US tariffs in late January–which served to obliterate the optimism building in the market and create uncertainty in the overall economy.

Sales under $5 million in the Greater Toronto real estate market were particularly impacted as buyers held back. Just 150 properties sold over $3 million between January and February in the Greater Toronto Area, compared to 169 during the same period in 2024–a decline of 11.2 per cent. Uber-luxe properties, however, continued to climb, with seven sales reported over $7.5 million year-to-date, including four over $10 million.

The luxury condominium market also gained momentum, with sales over $3 million rising nine per cent to 12 units this year, including five sales over $5 million. Last year, 11 properties changed hands over $3 million in the first two months, with three units moving over the $5 million price point.

Similar to the introduction of the municipal government’s land transfer tax in January 2024 targeting luxury properties, the market is expected to acclimatize to the tariffs after the initial shock. There are a large percentage of buyers looking to purchase at 80 to 90 cents on the dollar, though those offers are met with resistance from sellers who are unwilling to give any ground. Sellers who do choose to move at this time will have to ensure that the price of their home is compelling, otherwise it is unlikely to sell.

Patience will be key moving forward. While instability exists in the luxury market, the well has not run dry. Unique properties in sought-after locations will still be snapped up—this is particularly true in Rosedale (nine sales versus three), Leaside (six sales versus three), and the Bridle Path (seven sales versus two), where the year-to-date sales are up over year-ago levels. Permanent residents who have recently received their cards are also active. The best top-tier deals available are in neighbourhoods where inventory is plentiful.

Most new builds are now undertaken by the end user, although teardown activity has tapered with buyers hesitant to move forward on construction without knowing the true cost of materials. Many are now choosing from available resale product. Builders have wrapped up job sites and are no longer building on speculation.

Buyers in today’s luxury segment of the Greater Toronto real estate market tend to exercise more caution than sellers. Luxury homeowners, on the other hand, are holding firm, willing to wait out the political and trade climate until it settles. Deals are coming together, but negotiations can be challenging. Once a more stable political and economic picture emerges, a more traditional spring market is expected to materialize, but in May or June as opposed to March. That is expected to put a damper on overall sales this year, unless renewed confidence and pent-up demand is ignited in the back half of 2025. Buyer’s intentions remain strong. They’re simply waiting for a more stable climate or just the right deal.

Have questions, or are you ready to engage in the market? Connect with a RE/MAX agent today.

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