To understand Toronto property prices is to know its inverse relationship with interest rates, as 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 interest 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. In April 2022, sold prices peaked with an average selling price reaching $2.483M for houses and $896K for condos in Central Toronto.
Prior to Covid, from 2010 to 2022, we went through an unprecedented long period of low interest rates that were under 2%. This robust period ended In July 2022 when rates were raised above 2% and continued to climb from there. Rates rose to 5% and June 2024 marked the start of rates coming down, but only marginally.
Even though Toronto real estate prices have come down since the peak in 2022, long term appreciation remains strong. Property values in Toronto have more than doubled since 2010. Houses have appreciated in value over 150% and condos increased over 105%.
It will be interesting to see if the BoC will ever return interest rates to pre-covid levels of under 2%. If that happens expect real estate prices in Central Toronto to rise as more buyers will be able to afford 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 unlikely we will see property prices return to the record breaking highs of 2022 when interest rates were only 1%.
Latest Toronto House & Condo Appreciation Values As 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 |
|---|---|---|---|---|---|
| January 29, 2025 | 3.00% | -0.25% | |||
| December 11, 2024 | 3.25% | -0.50% | $1,088,641 | $2,138,508 | $779,954 |
| October 23, 2024 | 3.75% | -0.50% | $1,290,190 | $2,362,932 | $785,959 |
| September 4, 2024 | 4.25% | -0.25% | $1,212,356 | $2,241,577 | $771,262 |
| July 24, 2024 | 4.50% | -0.25% | $1,157,763 | $2,238,002 | $805,085 |
| June 5, 2024 | 4.75% | -0.25% | $1,236,013 | $2,237,225 | $832,900 |
| July 12, 2023 | 5.00% | 0.25% | $1,097,682 | $2,148,337 | $823,584 |
| June 7, 2023 | 4.75% | 0.25% | $1,220,890 | $2,313,678 | $841,583 |
| January 25, 2023 | 4.50% | 0.25% | $1,029,429 | $1,869,210 | $782,287 |
| December 7, 2022 | 4.25% | 0.50% | $1,127,155 | $2,240,144 | $809,315 |
| October 26, 2022 | 3.75% | 0.50% | $1,170,330 | $2,127,939 | $799,573 |
| September 7, 2022 | 3.25% | 0.75% | $1,144,467 | $2,206,605 | $839,362 |
| July 13, 2022 | 2.50% | 1.00% | $1,037,134 | $1,848,807 | $807,532 |
| June 1, 2022 | 1.50% | 0.50% | $1,202,797 | $2,257,583 | $830,258 |
| April 13, 2022 | 1.00% | 0.50% | $1,323,185 | $2,482,566 | $896,172 |
| March 2, 2022 | 0.50% | 0.25% | $1,248,844 | $2,428,843 | $891,110 |
| March 27, 2020 | 0.25% | -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 4, 2020 | 1.25% | -0.50% | $1,092,300 | $1,962,945 | $793,961 |
| October 24, 2018 | 1.75% | 0.25% | $981,148 | $1,786,883 | $696,206 |
| July 11, 2018 | 1.50% | 0.25% | $931,775 | $1,956,008 | $665,665 |
| January 17, 2018 | 1.25% | 0.25% | $858,367 | $1,863,096 | $618,250 |
| September 6, 2017 | 1.00% | 0.25% | $902,906 | $1,933,309 | $618,037 |
| July 12, 2017 | 0.75% | 0.25% | $819,564 | $1,806,264 | $605,758 |
| July 15, 2015 | 0.50% | -0.25% | $693,717 | $1,405,307 | $461,826 |
| January 21, 2015 | 0.75% | -0.25% | $675,958 | $1,273,146 | $441,495 |
| September 8, 2010 | 1.00% | 0.25% | $532,816 | $881,537 | $381,793 |
| July 20, 2010 | 0.75% | 0.25% | $502,756 | $797,135 | $376,831 |
June 1, 2010 | 0.50% | 0.25% | $546,223 | $867,935 | $387,126 |
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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