A Guide to Buying Real Estate in Toronto as a Foreign Investor (2025)

In June 2025, the Greater Toronto Area’s benchmark home price dropped to $995,100. This is a low not seen in the past four years and marks a 5.5 percent decrease from last year. The average sold price of all types of homes reached $1,101,691, which is a 5.2 percent drop from last year. Detached houses are now averaging $1.39 million, down six percent year-over-year. Semi-detached homes now average $1.09 million, and freehold townhouses are $966,000 on average. Condo apartments show the steepest decline: the average is $696,000, down 4.3 percent on the year, and 13.4 percent lower than their high point in 2022. For buyers who depend on financing, many lenders advertise five-year fixed mortgage rates as low as 3.94 percent in the city.

Reduced Prices and Rental Yields

Home values in Toronto are no longer surging. Instead, prices have moved either down or sideways, especially for condos. Oversupply has played a part in that. The Toronto Regional Real Estate Board forecasts stronger activity later this year, predicting a 12.4 percent increase in home sales for 2025. Rents remain a bright spot. Newer condos in the city core generate an average rental yield of four to 4.5 percent. Converted duplexes and multiplexes, especially in growing neighborhoods on the east and west sides, can bring in more than five percent.

Neighborhoods seeing renewed energy and investment include Leslieville and Riverdale. Factors like improved transit, updated buildings, and tech employers located nearby are driving demand there. The Ontario Line and the Eglinton Crosstown LRT have brought new attention to East Danforth, Mount Dennis, and the Junction area. Downtown West and Midtown maintain appeal for foreign capital, largely because of their location close to top universities and employment centers. Price-conscious buyers are also starting to look at Scarborough’s Golden Mile and parts of Etobicoke because of new city housing projects and strong rental appeal.

Toronto Rental Demand

Rental demand is high in many parts of Toronto. More than 160,000 new permanent and temporary residents have added to the market in the last year. This growth, along with little vacancy in popular and accessible neighborhoods, keeps pressure on rents. Units near universities often rent quickly, with multiple parties competing for leases in late summer. Tech workers and corporate professionals add to this demand, especially by choosing homes close to their jobs in the city center.

Comparing Property Types: Finding the Right Fit

Foreign investors can find a range of choices in Toronto, from detached houses to condos and multiplexes. For example, semi-detached homes and freehold townhouses each show a different price pattern compared to condo apartments, which have dropped in value more sharply since 2022. Looking through homes for sale in Toronto, buyers might also notice that different neighborhoods favor one property type over another, with Leslieville and Riverdale standing out for houses and the core city areas seeing more condo listings.

Rental yield and maintenance costs can vary. Newer condos often have steady cash flow due to lower expenses, while legal duplexes or triplexes in areas like East York or the Junction can outperform in net returns after proper renovations. Matching investment goals with the right property type is key.

Investment Tactics for Foreign Buyers

Many foreign investors aim for steady rental income and future price gains. Turnkey condos, especially newer models, often offer simple management. Average cash flow for these units is about $300 to $500 per month when buyers put down 20 percent. Recent price drops have allowed some deals in central neighborhoods to come close to neutral on cash flow, rare even a few years ago.

Some buyers increase their returns through upgrades. In East York and Danforth, buyers are turning older bungalows into duplexes. These projects cost $200,000 to $300,000 for a full renovation. The converted properties then produce combined rents from $4,500 to $5,200 monthly. After covering mortgage and property taxes, net returns may reach 10 percent. Multiplexes are another option. In the Junction, you may find triplexes and fourplexes priced at $1.2 to $1.4 million. Renovating each suite costs between $85,000 and $120,000. After upgrades, these rentals can bring in over $8,000 monthly, and cap rates can reach up to five percent for well-run buildings.

Market Balance in 2025

Buyer conditions in Toronto are different now compared to previous years. There is more inventory than before, so buyers have more choices and extra time to compare options. This has shifted the advantage away from sellers. This is most obvious in the condo market where supply levels are high. Still, sales volume is starting to tick up again, climbing by about eight percent between May and June of 2025. Some local agencies recommend using a cautious and data-driven strategy, with a focus on places where transit upgrades, new jobs, and rental demand remain strong.

Taxes, Risks, and Rules for Foreign Investors

Foreign buyers face strict rules and extra costs in Toronto. The Non-Resident Speculation Tax sits at 25 percent for those who do not have residency. Lenders also set stricter terms, often requiring down payments of 35 percent. There have been no expanded bans or surcharges in 2025, but regulations are still tight. Buyers must meet money-laundering reporting standards before closing. For buyers interested in upgrades, city rules on zoning, short-term rental limits, and property licenses are important. Each of these rules can change the property’s rental income and future resale value.

Foreign buyers looking for lower condo entry prices will find that in Toronto following the recent decline. However, price swings have been larger than usual in the investor-focused segments. The chance of flatlining or further dips is real, especially for condos and new construction that come with high monthly carrying costs. Many buyers still accept these risks because of strong rental returns and constant tenant demand.

How Foreign Buyers Can Succeed

Success in Toronto’s real estate market means careful planning. Investors should partner with local agents and property managers to meet all tax and legal rules. It helps to focus on growing neighborhoods tied to transit, jobs, and schools. Leslieville, Riverdale, parts of Etobicoke, and downtown near university campuses are some of the places where foreign investors continue to buy.

Following these steps and understanding the active market rules, property values, and rental trends can help foreign buyers make informed choices in Toronto’s property market in 2025.