Is Ontario real estate a smart investment right now?

Just about everyone likely has an opinion one way or the other, but the answer really isn’t a simple yes or no. It depends heavily on timing, location, financing, your risk tolerance, and your investment horizon. By examining current data, trends, and risks, you can make a more informed call.

In this post, we’ll walk through the pros and cons, the market trends, and what scenarios might make this a good – or bad – time to invest in Ontario real estate.

Recent Trends & Market Conditions

First, let’s take a look at the recent market landscape in Ontario. The data shows a real estate market that is under pressure, cooling in many segments, but with pockets of opportunity.

Price & Sales Trends

At a macro level, we saw 14,349 residential sales across Ontario in September 2025, which was an increase of 7.3% over September 2024 and the strongest September in 4 years. While this is certainly positive, these results aren’t necessarily reflected in sale prices. In fact, while sales have improved a bit over the last month or so, sale prices are still down. Across the province, the average sale price was $828,896 in September, which was a decrease of 2.9% compared to September 2024.

More importantly, though, it’s critical to look specifically at market performance in your community – your city, your region, and if adequate data is available, your neighbourhood. The reason for this is that market performance can vary greatly from one community to another, so relying only on provincial data likely won’t tell you the whole story.

For example, in September, the average residential sale price in Hamilton was down 5.0% year-over-year while in Burlington it was down 8.9%, yet in Oakville it was up 2.3%. And, of course, different neighbourhoods within these cities will likewise have varying results.

Nearly endless amounts of data is available to help inform your decision to buy or not to buy. Beyond the number of sales and average sale price discussed above, you might also look at median sale price, number of new listings, average and median days on market, months of inventory (this is a good one!), the general mix of homes sold in a given period, and market performance for various property types (i.e. detached, semi-detached, townhomes, condo townhomes, condo apartments, etc), But, beyond real estate sales data, there are also many other considerations should include such as inflation data, the latest on tariffs, employment data and news, the political climate (at all levels, including municipally), any changes expected to municipal regulations and property taxes, bank policy changes, the interest rate environment, measures of consumer confidence, and more.

Lately, unemployment rates have been ticking higher – in Ontario the unemployment rate in September 2025 was 7.9% while last September it was 6.9%. Generally speaking, a weak job market, uncertainty about tariffs, and higher living expenses thanks to inflation are widely considered to have played a role in why sales activity over the last year or so has been rather mixed.

Forecasts & Outlook

The CMHC expected a modest decline in prices in 2025, especially in Ontario and British Columbia, and through 9 months of the year, this is largely holding true. TD Economics describes Ontario’s housing market as “weak” in 2025 relative to more bullish regions like the Prairies. They observe that in Ontario and British Columbia there’s “too little demand chasing too much supply,” which favours buyers.  This, too, is accurate – in many communities, we’re seeing increased inventory, fewer sales, longer days on market, and increased months of inventory.

Looking ahead to 2026, as of August 2025, RBC forecasts that home sales in Ontario may rise ~11.6% (i.e. more transactions) and prices will continue to inch downward by ~1.4%.  And, as of October 16, 2025, CREA anticipates a similar increase in sales in 2026 of ~10.4% in Ontario, while also projecting the average sale price will rise by ~2.6%. Their price prediction differs a bit from RBC, so this is likely a good time to point out that forecasts can vary and that actual results will almost certainly vary to some extent.

Other Structural & Demand Factors

Ontario’s population and immigration trends previously supported strong housing demand. But recent federal immigration policy shifts may slow net inflows, which could continue to diminish demand as we’ve seen over the last year.

Housing supply is not uniform. Condo deliveries are expected to slow in coming years as developers put the brakes on new condo projects, especially in the Greater Toronto Area. Currently, there is significant over-supply of resale condos in Toronto, for example.

The affordability constraint is real. High interest rates in prior years put downward pressure on demand. As rates soften, more buyers may enter.  RBC has recently published reports highlighting the fact that the cost of home ownership has been coming down throughout 2025, which could make buying a home more attractive to those who have been considering a purchase.

Throughout much Ontario, the ratio of sales to new listings is low. Another similar measure, months of inventory, which is calculated by dividing the total number of active listings by the number sales in the most recent month, tells us approximately how long (in months) it would take to sell all currently available inventory, assuming no new listings. Over 4 months of inventory is considered a Buyer’s Market. As of the end of September 2025, most local communities are experiencing Buyer’s Markets: Oakville is 5.3 months of inventory, Burlington is at 4.3 months of inventory, Hamilton is at 5.2 months of inventory, and Dundas is at 3.8 months of inventory. This clearly tells us that there is more supply than demand.

Arguments For Investing Now

Why might this be a good time to invest in Ontario real estate?

1. Buying on a dip / discount opportunity

The market has softened in many segments. You might be able to acquire properties at more favourable valuations than at the peak in 2021–2022.

2. Lower financing costs ahead

If interest rates continue to fall (or at least stay roughly around where they are now), this could improve cash flow prospects and reduce debt burden.

3. Long-term fundamentals

Ontario remains a center of population, economic activity, and job growth in Canada. Over a 10+ year horizon, real estate ownership in desirable locations tends to appreciate.

4. Potential for yield/rental income

If you purchase in a good neighbourhood with strong rental demand, you may enjoy income generation while waiting for capital appreciation.

5. Diversification & inflation hedge

Real estate often acts as a hedge against inflation and provides diversification in a portfolio.

Arguments Against Investing Right Now

That said, there are substantial risks and headwinds you should weigh.

1. Price declines may not be over

Some forecasts suggest additional softening in Ontario’s market through 2026, especially for certain property types such as condos.

2. Weak upside in near term

Many forecasters expect only marginal price gains, or even declines, in the short term for Ontario.

3. Timing and carrying cost risk

If you purchase now but the market continues to soften for 1-2 years, you may face negative equity or lower returns. Meanwhile, your carrying costs such as taxes, insurance, maintenance, etc. must still be paid.

4. Interest rate/monetary policy risk

If interest rates remain higher than expected or the central bank tightens again (or even delays cuts), your borrowing costs could erode returns.

5. Demand uncertainty

If immigration continues to slow or economic growth falters, demand for housing may weaken, especially outside the strongest markets.

6. Supply competition

In markets with elevated listings or upcoming new supply, competition could erode both resale prices and rents pushing sellers and landlords to discount heavily.

What Strategy Could Work

If you lean toward investing, here are some strategies and caveats to consider:

• Buy in strong submarkets or high-demand locations. Locations with good transit, job access, universities, etc., tend to weather downturns better.
• Consider lower-risk property types. Single-family detached homes or townhouses in stable neighbourhoods often carry less downside than, say, luxury condos.
• Focus on cash flow and yield, not purely appreciation. Be sure the rental income (less expenses) covers debt servicing and provides a margin of safety.
• Adopt a medium-to-long horizon. Don’t expect quick flips – real estate investments often take years to mature and the current market doesn’t favour quick flips.
• Use conservative leverage. Don’t stretch too far; if the market dips further, you’ll want a cushion.
• Stay flexible. Be ready to shift plans if conditions deteriorate.
• Pay attention to interest rates. If bond yields and interest rates move against you, there is the potential that your returns will change quite dramatically.
• Don’t rush things. With high levels of inventory, you have time to fully evaluate opportunities. There’s no need to make rash decisions.

Verdict: Is It a Good Time?
In my view, it’s not a “slam-dunk yes” as in 2020-2021, but for an investor with some patience, good location selection, and conservative leverage, there are opportunities. So, in short, for the right investor, under the right conditions, and with the right degree of caution, things could work out well. But, the downside risks are meaningful, so you need to have a margin of safety and exit strategies.

If interest rates continue to fall, demand picks up, and the broader economy remains stable, you might capture respectable returns. On the other hand, if we see further macroeconomic weakness, those gains could be much harder to realize in the near term.

Get in Touch

As your trusted resource for all things real estate, I’d be more than happy to provide you with additional insight on how to best prepare for buying or selling real estate in any market. If you have questions about the market, please reach out anytime.

Want a better real estate experience? Let’s chat.