GTA development land market in 2025: values down 29%, approval premium dead, rental is the play. | James Fields | fieldsre.ca

Just went through the Q4-2025 High-Rise Land Insights Report and figured I'd share the key takeaways for anyone watching the GTA multifamily space. Some interesting shifts are happening.

The numbers:

• Average price per buildable sf fell to $78 in 2025 (down 16% from 2024, 29% from 2018)
• 416 area (Toronto) averaged $89 psf, 905 area (suburbs) dropped to $42 psf
• High-rise transactions in 905 collapsed from 20 to just 7 year-over-year

What's actually happening:

The "approval premium" is dead. Zoned sites used to trade 40-50% above raw land. Now? Only a 5% premium. With pre-construction condo sales frozen, being shovel-ready doesn't matter if nobody's buying.

Buyers aren't paying for speed anymore. They're underwriting rental.

The upzoning math is wild right now:

Three case studies stuck with me:

• 69 Old Mill Terrace: Bought at $12M for 14 storeys, filed for 39 storeys post-closing → effective land cost dropped to $40 psf
• 36-40 Avondale: $10.6M purchase, now pitching 49 storeys → effective basis $30 psf

If you know how to work the entitlement process, the effective cost of density hasn't been this attractive in years.

Distress is showing up:

Nearly 25% of Q4 sales were distressed. The "instant condo developers" who surfed the peak on thin equity are handing back keys. Bulk unit trades at 2015-2016 pricing.

The thesis:

"Wait till '28." Most peak-era projects will have completed by then, inventory should clear, and completions are headed for 20-year lows. Developers buying today are betting on rent growth when supply evaporates. The shadow inventory from condo investors is projected to drop from 20,000+ units annually to under 5,000.

Quick takeaways:

• Megatower condos are paused. Mid-rise rental in walkable areas is where the pencil works
• Entitlement expertise = huge advantage right now
• Patient capital has leverage
• Distress is real but selective - not a fire sale

Curious what others are seeing on the ground. Anyone here looking at sites or dealing with lenders on new acquisitions? The "wait till '28" thesis sounds right or too optimistic?

| James Fields | fieldsre.ca