What the Q4-2025 High-Rise Land Report Signals for the Future of GTA Development
Market Insights:
By James Fields, Real Estate Broker – Multifamily & Development Investment Housing
If you’ve been active in the Greater Toronto Area development market over the past 18 months, you know it’s felt uncertain and opaque. However, data brings clarity. The Q4-2025 High-Rise Land Insights Report provides one of the most grounded snapshots we have seen of where the market stands, and where disciplined capital is positioning itself for the next cycle.
The headline figure is clear: the average price per buildable square foot for high-density land across the GTA declined to $78 in 2025, representing a 16% year-over-year decrease and a 29% correction from 2018 levels. On its face, this appears negative. In reality, it reflects a rational repricing after a prolonged period of land banking driven by aggressive condominium underwriting and perpetual price-growth assumptions. Today’s buyers are not speculators; they are well-capitalized developers underwriting projects conservatively with longer time horizons.
One of the most telling shifts in the report is the compression of the premium for zoning certainty. Historically, zoning-approved sites traded at a 40% to 50% premium over raw or pre-application land. In 2025, that premium narrowed to approximately 5%. The reason is straightforward: shovel-ready sites only carry value if the pre-construction condominium market can absorb supply. With that market effectively stalled, speed to market is no longer commanding a premium. Buyers are underwriting rental tenure, focusing on location fundamentals and long-term viability rather than near-term condo exits.
Transaction data reinforces this repositioning. In the 905 municipalities, high-rise land transactions declined sharply from 20 deals in 2024 to just 7 in 2025, while mid-rise activity remained comparatively stable. Mid-rise rental projects offer faster lease-up, lower capital intensity, and less reliance on offshore presale demand. Several institutional and private developers, including Carttera, Graywood Developments, and Fengate Asset Management, are actively acquiring sites with rental delivery targeted for 2027–2028, positioning for a period when new supply is projected to decline materially.
The mathematics of entitlement upside are particularly instructive. At 69 Old Mill Terrace, a purchaser reportedly acquired the site for $12 million based on a fourteen-storey concept and subsequently filed for a thirty-nine-storey application post-closing, materially reducing their effective land cost per buildable foot. Similarly, at 36–40 Avondale, a successful upzoning to forty-nine storeys significantly lowered the purchaser’s effective density basis. The lesson is not simply that land prices have declined, but that effective density costs for buyers who understand entitlement strategy are more compelling than headline averages suggest.
Distress is also playing a measurable role. In 2025, the Greater Toronto and Hamilton Area recorded 172 distressed land transactions totalling approximately $836 million, of which 44%, roughly $367 million, involved residential development land. Importantly, distress is not systemic; it is concentrated among thinly capitalized condominium groups that acquired at peak valuations. For well-capitalized buyers, this environment presents selective acquisition opportunities rather than a broad market collapse.
The report introduces a phrase that will likely define this cycle: “Wait till ’28.” The premise is that projects initiated at peak valuations will largely be completed by then, standing inventory will be absorbed, and annual new-unit completions, projected to fall toward twenty-year lows, will struggle to keep pace with population growth. Developers acquiring today are underwriting into a constrained future supply, not immediate recovery.
From a strategic standpoint, several approaches emerge. First, partially entitled or entitled sites where prior sponsors have exhausted capital can offer attractive entry pricing relative to replacement cost. Second, mid-rise rental projects in walkable, transit-connected neighbourhoods offer a pragmatic path forward with fewer financing hurdles and stronger absorption fundamentals. Third, joint ventures with long-term landowners can unlock density value through entitlement expertise. Fourth, assembling sub-acre sites in established neighbourhoods remains a viable path for achieving incremental density increases without full Official Plan amendments.
That said, risks must be acknowledged. The pre-construction condominium market remains fragile, financing terms are materially more conservative, and construction and soft costs, including development charges and community benefit levies, continue to pressure pro formas across GTA municipalities. The so-called “spread compression” phenomenon, in which completed units trade materially below their original presale pricing, may suppress certain submarkets for years. Policy shifts at municipal and provincial levels remain an ongoing variable. Finally, the “Wait till ’28” thesis requires balance sheet strength and disciplined carrying assumptions over a multi-year horizon.
My guidance to clients is consistent: underwrite conservatively, assume rental tenure unless presales are secured, prioritize entitlement expertise to uncover density upside, and maintain liquidity sufficient to withstand 24 to 36 months of carry. Cycles of this magnitude do not simply eliminate opportunity; they redistribute it to those with patience, discipline, and capital structure resilience.
The fog that characterized the past eighteen months is beginning to lift. The developers who treat this period not as a disruption but as a strategic acquisition window will define the next phase of GTA multifamily growth.
If you are evaluating land acquisitions, distressed opportunities, or joint venture structures in the GTA development market, I welcome the opportunity to discuss.
