Contrary to popular belief its not real estate agents who influence property prices but rather its the benchmark interest rate set by the Bank Of Canada. In general the higher the interest rate, the lower the property price as it becomes less affordable for buyers to purchase a home. A higher interest rate means higher borrowing costs for a Buyer.
Conversely, when interest rates go down, property prices go up. At the beginning of Covid in March 2020, the Bank Of Canada lowered its benchmark rate to below 1% making it unbelievably affordable for buyers to get into the market. These low rates lasted for over two years resulting in the highest sold prices for real estate in Toronto history for both houses and condos. Sold prices rose to their highest point in April 2022 with the average selling price for a property reaching $1.323M in Central Toronto.
From 2010 to 2022 we went through an unprecedented long period of low interest rates that were under 2%. By July 2022 rates were above 2% and started climbing. They peaked at 5% and then June 2024 marked the start of rates coming down, but only marginally.
These post-covid interest rates have pushed Buyers into lower price ranges as they now face monthly mortgages payments that are on average 30% higher than what the market has been accustomed to.
While property prices have come down since the peak in 2022, properties in Toronto have more than doubled in value since 2010. Houses have appreciated in value over 150% and condos increased in value over 105%.
If you were lucky enough to own your home or condo during the 12 year period when interest rates were 2% or less, you've done exceptionally well with your property's appreciation. If you sell in today's market you will still make a very healthy return on your investment. Also you can take advantage of buying in a market with lower property prices.
The key for all Sellers in this market is to be realistic with your list price. A property listed at 2022 prices will not sell but rather just sit and get shopworn. This becomes compounded when other comparable condos in the same building or comparable houses in the same neighbourhood come up for sale. The competition increases the supply bringing prices down even further as Buyers now have more choice.
If you truly want to sell you have to have a realistic asking price reflective of what comparable properties have most recently sold for.
With the bank rate currently at 3.75% it will be interesting to see if the BoC will ever return rates to pre-covid levels of under 2%. If that happens expect real estate prices in Central Toronto to really take off as more buyers will be able to get into the market.
But realistically this is wishful thinking.
The BoC has indicated that it is keen on returning interest rates to a neutral state where it neither restricts nor accelerates the economy. Currently that neutral rate is somewhere in the range of between 2.25% and 3.25%. This makes it highly unlikely we will see property prices return to the record breaking highs of 2022 when interest rates were only 1%.
Latest Toronto House & Condo Sold Prices Compared To Bank Of Canada Interest Rates
2010 To Present Day
| Bank Of Canada Release Date | Interest Rate | Change | Average Sold Price Toronto Central | Average Sold Price HOUSES Toronto Central | Average Sold Price CONDOS Toronto Central |
| June 1, 2010 | 0.50% | 0.25% | $546,223 | $867,935 | $387,126 |
| July 20, 2010 | 0.75% | 0.25% | $502,756 | $797,135 | $376,831 |
| September 8, 2010 | 1.00% | 0.25% | $532,816 | $881,537 | $381,793 |
| January 21, 2015 | 0.75% | -0.25% | $675,958 | $1,273,146 | $441,495 |
| July 15, 2015 | 0.50% | -0.25% | $693,717 | $1,405,307 | $461,826 |
| July 12, 2017 | 0.75% | 0.25% | $819,564 | $1,806,264 | $605,758 |
| September 6, 2017 | 1.00% | 0.25% | $902,906 | $1,933,309 | $618,037 |
| January 17, 2018 | 1.25% | 0.25% | $858,367 | $1,863,096 | $618,250 |
| July 11, 2018 | 1.50% | 0.25% | $931,775 | $1,956,008 | $665,665 |
| October 24, 2018 | 1.75% | 0.25% | $981,148 | $1,786,883 | $696,206 |
| March 4, 2020 | 1.25% | -0.50% | $1,092,300 | $1,962,945 | $793,961 |
| March 13, 2020 | 0.75% | -0.50% | $1,092,300 | $1,962,945 | $793,961 |
| March 27, 2020 | 0.25% | -0.50% | $1,092,300 | $1,962,945 | $793,961 |
| March 2, 2022 | 0.50% | 0.25% | $1,248,844 | $2,428,843 | $891,110 |
| April 13, 2022 | 1.00% | 0.50% | $1,323,185 | $2,482,566 | $896,172 |
| June 1, 2022 | 1.50% | 0.50% | $1,202,797 | $2,257,583 | $830,258 |
| July 13, 2022 | 2.50% | 1.00% | $1,037,134 | $1,848,807 | $807,532 |
| September 7, 2022 | 3.25% | 0.75% | $1,144,467 | $2,206,605 | $839,362 |
| October 26, 2022 | 3.75% | 0.50% | $1,170,330 | $2,127,939 | $799,573 |
| December 7, 2022 | 4.25% | 0.50% | $1,127,155 | $2,240,144 | $809,315 |
| January 25, 2023 | 4.50% | 0.25% | $1,029,429 | $1,869,210 | $782,287 |
| June 7, 2023 | 4.75% | 0.25% | $1,220,890 | $2,313,678 | $841,583 |
| July 12, 2023 | 5.00% | 0.25% | $1,097,682 | $2,148,337 | $823,584 |
| June 5, 2024 | 4.75% | -0.25% | $1,236,013 | $2,237,225 | $832,900 |
| July 24, 2024 | 4.50% | -0.25% | $1,157,763 | $2,238,002 | $805,085 |
| September 4, 2024 | 4.25% | -0.25% | $1,212,356 | $2,241,577 | $771,262 |
| October 23, 2024 | 3.75% | -0.50% | $1,290,190 | $2,362,932 | $785,959 |
| December 11, 2024 | 3.25% | -0.50% | $1,088,641 | $2,138,508 | $799,954 |
| January 29, 2025 | 3.00% | -0.25% | $1,308,504 | $2,022,017 | $787,079 |
| March 12, 2025 |
Victoria Boscariol is a real estate agent in Toronto Canada with Chestnut Park Real Estate Limited Brokerage. With over 25 years experience, Victoria has been helping people successfully sell and buy homes and condos in Midtown & Central Toronto including Rosedale, Forest Hill & Yorkville.
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