1. Supply and Demand
At the heart of it all is a simple economic principle: supply and demand. Toronto is one of the fastest-growing cities in North America, with more people wanting to live here than there are homes available. When demand outpaces supply, prices naturally rise.
Even as new condos and developments go up, the rate of new housing isn’t keeping up with the number of people looking to buy or rent.
2. Immigration and Population Growth
Canada has a strong immigration policy, and Toronto is the top destination for many newcomers. People are drawn here for job opportunities, education, diversity, and safety. In fact, over 100,000 people move to the GTA each year.
That growing population puts pressure on the housing market. More people = more demand = higher prices.
3. Toronto Is Becoming a Vertical City
Because of land constraints (more on that below), Toronto is growing up rather than out. Condominiums have become the dominant form of new housing, especially downtown.
While this adds supply, condos often serve different needs than detached homes, which remain limited and increasingly rare, driving up their prices even more.
4. We’re Running Out of Land
Toronto may seem big, but there’s only so much land available for new homes. Detached homes, townhomes, and even mid-rise buildings are competing for limited space.
This situation is similar to what cities like New York have faced, being on an island limits how far they can grow. That scarcity of land adds value to what already exists.
5. Greenbelt Protection Limits Expansion
Adding to the challenge, Toronto is bordered by Ontario’s protected Greenbelt. This environmental policy prevents urban sprawl by preserving natural areas, farmland, and forests.
While it’s crucial for sustainability, it also restricts how far the city can expand. So, just like Manhattan had to build upward and adapt to limited space, Toronto faces similar constraints that keep prices elevated.
Final Thoughts
Toronto’s real estate market is shaped by a unique combination of factors: relentless demand, limited supply, consistent immigration, vertical development, and land restrictions. All of these contribute to what we’re seeing in today’s prices.
If you’re thinking about buying or selling, it’s more important than ever to understand the landscape and to work with someone who knows it well.
Have questions about the market or your next move?
📧
[email protected]📞 416-560-4468
🌐 www.jordanglaser.ca