The GTA high-rise land market in 2025 and 20226 is no longer going through a mild correction. It has moved into a much deeper pricing reset. Land values for high-density residential development have continued to fall, reflecting weaker investor confidence, slower condo absorption, and a more challenging financing environment.

Across the Greater Toronto Area, land prices have been under sustained pressure since the broader real estate market began to soften in 2022. What we are seeing now is not a one-year adjustment, but a multi-year repricing of development land. Developers are no longer underwriting projects based on aggressive future sales assumptions. Instead, they are becoming far more cautious about what end users and investors will actually pay, how quickly units can be absorbed, and whether projects can still secure workable financing.

In the City of Toronto, high-rise land pricing has fallen sharply from the peak years. The market has given back much of the pandemic-era run-up, and land is now trading at levels that reflect a much more conservative development outlook. Suburban markets in the 905 have weakened even more, with softer pricing, lower expected revenue, and noticeably reduced liquidity. This tells us that the correction is not happening evenly. Core urban locations are holding up better, while outer markets are facing greater pressure.

One of the most important changes in 2025 is that cheaper land alone is no longer enough to unlock deals. In past years, developers were often willing to pay a significant premium for sites with advanced planning work or zoning approval because they expected strong condo sales on the back end. That premium has now narrowed substantially. Even approved land is not commanding the same pricing advantage it once did, because the real question today is not just whether a site is ready to build, but whether a project can actually sell.

This is why many developers are shifting their attention toward lower-risk formats. Mid-rise projects and smaller-scale developments have become more appealing than large high-rise towers in many cases. They are often easier to approve, require less capital, and carry less sales risk. In a market where pre-construction condo demand remains weak, developers are naturally moving toward formats that offer better control and less exposure. The report also notes that mid-rise land has recently traded at stronger values than high-rise land, which highlights how risk appetite has changed.

Another major theme is the growing divide between the for-sale condo model and the rental development model. Confidence in the pre-construction condominium market is extremely weak, but purpose-built rental has become much more attractive. Government incentives, including GST relief and CMHC-backed financing programs, are helping keep some rental projects feasible. In many cases, projects that may not work as condos are now being reconsidered as rental buildings instead. That does not mean rental is easy, but it does mean developers are looking for alternatives to the traditional condo presale model.

At the same time, the current slowdown is creating the conditions for a future supply shortage. Because so few new projects are moving ahead, the pipeline for completions later this decade is thinning out. The report suggests that by 2028, the GTA could see far fewer new condo and rental apartment deliveries than the market will likely need. If that happens, today’s development slowdown could become tomorrow’s housing shortage. In other words, weak land values today may set the stage for renewed upward pressure on rents and prices later.

My view is that the GTA land market is now in a waiting phase rather than a recovery phase. Prices have already corrected substantially, but developers are still not seeing enough certainty on the revenue side to become aggressive again. The biggest issue is no longer simply land cost. It is sales confidence, lending conditions, and the overall feasibility of getting projects off the ground. Until those pieces improve, land values may remain soft, and activity will likely stay concentrated in the best transit-oriented and best-located urban sites.

So while it may be tempting to say land is now cheap, that is only part of the story. In Toronto real estate development, cheaper land does not automatically mean stronger activity. The market still needs confidence in end sales, stable financing, and a clearer path to profitability before a true rebound can begin.