If you’ve been following the headlines lately, you’re not alone in wondering: Is the Toronto housing market about to crash? In this blog, we’ll look back at the market’s ups and downs, explore why so many buyers are prioritizing top-tier locations over everything else, and review what makes prime west end pockets like Bloor West, Roncesvalles, and High Park more resilient when prices get shaky.

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Has Toronto’s Housing Market Always Had Ups and Downs?

The Toronto housing market has never been a one-way street. It’s had peaks, valleys, and everything in between — and knowing that history is key to making smarter, calmer home buying decisions. 

The 1990s crash & long recovery:  The 1990 Canadian real estate crash hit hard. After years of high inflation and speculative buying, the Bank of Canada stepped in with aggressive rate hikes — and the market paid the price. In Toronto, average home prices fell 20–30% from their 1989 peak and stayed low for much of the next decade. The recovery was anything but quick, with many neighbourhoods taking over ten years to climb back to those highs.

The 2008 financial crisis:  While the U.S. housing market collapsed, Toronto felt more of a shiver than a shock. Prices dipped slightly and sales slowed, but strong lending standards and limited overbuilding helped the market bounce back quickly — in fact, by late 2009, prices had already begun climbing again. It was a reminder that global events can ripple through even the most stable local markets — but fundamentals still matter. 

Do you have more questions about buying a home or selling your home in Toronto’s west end? We’ve got you covered. Here are some posts you can read next:

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The 2017 correction & bubble fears: In 2017, the Ontario government introduced a 16-point plan to cool an overheated housing market — and it had an immediate impact. A surge of speculative buying, rapid price growth, and sudden policy changes collided to trigger a sharp correction. Home prices fell by nearly 18% in just a few months across many segments. It was a clear reminder: even in strong markets, shifts can happen fast. 

Pandemic boom & 2022 peak: Then came the COVID-era surge. Low interest rates, pent-up demand, and migration acted like rocket fuel, pushing Toronto home prices to record highs by early 2022. But the momentum didn’t last — by that summer, listings were sitting longer and prices began to slide, as the Bank of Canada kicked off a rapid series of rate hikes that quickly cooled the market. 

Recent shifts & the condo crash: Between 2022 and 2023, the Teranet–National Bank House Price Index — a key measure of Canadian home prices — dropped by around 10%, marking one of the sharpest year-over-year declines on record. But that headline doesn’t tell the full story. Not all segments were affected equally. 

The Toronto real estate market is not a static thing. It’s always changing. But did you know there are ways to make the real estate cycle work for you?

A Closer Look at the Current Situation

The condo market has been hit the hardest. Sales and prices are down, and inventory is piling up. In some buildings, units are sitting unsold for months — a sharp contrast to the bidding wars of just a few years ago. Boutique condos with character in smaller buildings and desirable pockets are still moving, but the big downtown towers are struggling.

Meanwhile, house prices have shown much more resilience. As of spring 2025, the average house price in Toronto sat at approximately $1,110,924 — a sign that, despite overall cooling, mid- and upper-tier freehold homes are holding their ground. 

And in West Toronto’s prime pockets, multiple offers are still very much in play — but it’s the location and quality of the home that are driving the action. Turnkey, well-renovated properties in A+ neighbourhoods continue to command a premium. Case in point: a detached home in Bloor West Village set a new record in early 2025, selling for $3,175,000 — proof that top-tier homes in established neighbourhoods are still performing, even in a shifting market. 

How much of a difference does home prep and staging make when selling your home? Read these posts next to find out:

• 5 Staging Tips to Help Sell Your West Toronto Home For More Money
• Will My House Sell Faster if it’s Staged?
• 5 Reasons Why Bold Design + Quality Renovations are a Winning Combo for Your Home Sale

So — Will the Market Crash? 

First, let’s define “crash.” For most of us, that means a steep, sudden drop of 20–30% or more across many segments, potentially leaving buyers underwater. So although a major crash seems unlikely — especially in prime, established neighbourhoods, a further correction and softening is still on the table, particularly in the condo sector. When it comes to single-family homes across the city, forecasts are mixed. Some predict modest price growth, while others expect slight dips or flat performance heading into 2026, largely due to rising inventory levels and lingering affordability pressures. 

Why Do Established West End Neighbourhoods Hold Their Value Better?

Not every neighbourhood reacts the same way when the market shifts. While some areas feel the full swing of ups and downs, places like Bloor West Village, Roncesvalles, and High Park tend to stay more balanced. That’s exactly the trend we’re seeing now: despite declines elsewhere, well-located houses in the west end remain in demand. 

Why? Because people genuinely want to live here — and stay here. Good schools, tree-lined streets, transit, parks, and a strong sense of community never really go out of style. 

There’s also no more room for new home builds, which keeps supply in check. These aren’t high-turnover, investor-heavy neighbourhoods — they attract long-term residents who care about where they live. And in slower markets, that kind of steady demand makes a big difference. 

So yes — while parts of Toronto’s market may wobble, these west-end corridors tend to act as shock absorbers. 

If there’s one thing we love as much as helping our clients buy and sell real estate, it’s talking about Toronto’s fabulous West End neighbourhoods. We’ve written about it on our blog extensively.

Feeling Nervous? Here’s How to Stay Grounded 

Worried about timing the market? You’re not alone — but there are ways to stay smart and steady. 

• Plan for more than today’s rates 
  Make sure your budget still works if rates tick up another 1–2%. 

• Focus on long-term value 
  Choose homes in great locations with lasting appeal — think schools, transit, and strong bones. 

• Leave yourself wiggle room 
  Avoid stretching your finances to the limit. Life (and rates) happen. 

• Take your time 
  You don’t have to go all in at once. Watch the market and move in stages if that feels right. 

• Expect some bumps 
  Even great markets have dips — but in stable neighbourhoods, they tend to bounce back faster. 

One of the best ways to protect yourself during turbulent periods in the market is to make sure you’re working with an experienced professional. It makes all the difference! Here are a few more posts you might enjoy next:

• What Makes a Great Real Estate Agent in Toronto’s West End?
• 5 Ways We Speed Up the Home Selling Process and Blow Buyers Away
• 5 Ways We Speed Up the Process and Blow Away Buyers

Bottom Line: No Crash, but Caution Warranted 

So — when will the Toronto housing market crash? We don’t see a crash in the near future that drags high-quality west end housing down 30 %. But we do see moderation, corrections in weaker segments, and a slowing pace of growth. 

For the buyer who wants comfort in volatility, choosing a stable, well‑loved neighbourhood — even at a premium — is often wiser than chasing cheap upside elsewhere. Location isn’t just a cliché — in uncertain markets, it can be your safety net. 

Do you have questions about buying or selling in Toronto’s west end? Get in touch with us today by filling out the form on this page, calling us at 416-909-1602, or emailing us at hello@getnested.ca.

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