2025 Had the Lowest Home Sales in 25 Years - What now?

The Big Picture: Activity vs. Availability

Sales activity remains subdued across the GTA. Annual home sales in 2025 declined compared to 2024, with buyers clearly hesitant to commit amid ongoing economic uncertainty. According to TRREB who reported 62,433 home sales in 2025, down 11.2% year-over-year, and their lowest level in 25 years in the GTA. All this while new listings climbed to 186,753 — up 10.1%

That imbalance — fewer buyers and more sellers — has been the defining trend for the market over the past year.

Prices reflect this shift. The average selling price in 2025 was $1,067,968, down 4.7% from 2024, while the MLS Home Price Index composite was down 6.3% year-over-year by year-end

In simple terms: prices have softened, but not collapsed — and affordability has improved as a result.

Inventory Is Doing the Heavy Lifting

One of the most important metrics I continue to watch is Months of Inventory. It helps explain not just where prices are, but why they’re behaving the way they are.

Simple understanding of MOI - Months Of Inventory

Zero - 2/3 months of inventory available means a competitive market where prices tend to increase, the closer to zero months we are the faster prices increase.

3-5 months of inventory is a balanced market, prices usually flat line and the market moves slower but the demand is very neighbourhood and home type dependent.

5, 6 + months or more and the market is slower, the higher the months go the more likely we see prices drop, its basically a buyers market and most homes sit on the market for weeks and months.

Current Months Of Inventory

GTA All Home types - 5.4 Months

GTA Freehold Homes (not Condos) - 4.6 Months

GTA Condos - 6.78 Months

Toronto All Home types - 5.6 Months

Toronto Freehold Homes - 4.10 Months

Toronto Condos - 6.75 Months

By the end of 2025, active listings across the GTA sat well above long-term norms, pushing the market firmly into balanced-to-buyer-friendly territory. This has allowed buyers to negotiate — something that was nearly impossible during the peak years.

Condos, in particular, continue to carry the most inventory pressure.

What I’m Seeing on the Ground

This data lines up closely with what I’m seeing day to day but the data always lags to what buyers and sellers are thinking and how they are acting.

Buyers are active — but selective. They’re watching rates, watching the economy, and watching how long homes are sitting. Many are prepared, pre-approved, and ready — but only if the right opportunity comes along.

Sellers, on the other hand, are realistic - when they have to be. Homes that are priced correctly and positioned well still sell. But listings that chase yesterday’s prices are sitting — sometimes for months — until the market forces an adjustment.

The gap between, expectation and reality, is still where most friction exists.

I am still hearing from many who want to be active in 2026 but are cautious, some say they see great opportunity, others are more subdued and worried about a recession, job losses and a further decline in prices. But both sides are paying attention for signals on how they should proceed.

What This Means Heading Forward

We are no longer in a market where timing alone guarantees success. Strategy matters again.

• Buyers have leverage, time, and choice — especially in the condo and entry-level freehold segments.

• Sellers need to be precise on pricing, presentation, and marketing from day one.

• Neighbourhood quality still matters: walkability, transit access, schools, and lifestyle continue to separate strong performers from the rest. The turnkey ready homes in sought after neighbourhoods are still moving quicker than everything else, especially those in the sweat spot of 1.6M/1.7M or lower. It’s the old adage - location, location, location.

Final Thoughts

Normally sluggish periods can sometimes surprise us — but this market isn’t running on momentum. It’s running on confidence, and that confidence hasn’t fully returned yet.

That said, cycles don’t end quietly. When sentiment shifts, it tends to do so quickly. Understanding where we are before that shift happens is where real opportunity lies.

My advice for those looking to get into the market in 2026.

Don’t try to time the market. Prices have come down for homes considerably, we are talking $150,000, $200,000, $300,000 in some cases for freehold homes priced in the $1Mill - 2.5Mill range and for the luxury market ($3M + ) prices have dropped $300K, $500K even $700K in some instances depending on the home and neighbourhood. Similarly, condos have seen prices go from $1100-$1300 a Square foot to now $800-$900 a Square foot, 1 Bedroom condos that used to sell for $600K+ are now in the low to mid $400’s, two bedrooms that were $850,000 are now barely getting $650K.

Instead of trying to time the market like some day trader, I suggest to buy based on affordability and lifestyle, if you are in a position to get into a home or neighbourhood you could not before, this seems to be the window for many. And do not be afraid to negotiate, you never know when you can save another

$30K, $40K, $100K or perhaps more.

My opinion on how 2026 will unfold.

It will be a good year for opportunists, buyers who have been watching closely to get in the market for the first time especially or those upsizing from smaller homes will continue to search. Those who once could not afford that 2 Bedroom Condo or 4 Bedroom House will take advantage in 2026. While I believe the market will be slow overall and prices will continue a slight downward trend I do think it may end up being a better year in terms of units sold than 2025 for the following reasons.

1. More and more buyers are on the sidelines paying attention and recognize the opportunity to upsize

2. We may see a couple more rate cuts to help affordability further as we head into Spring/Summer

3. Selection will be the best we have seen it in decades and first time buyers will continue to take advantage much the way they did to end the year

4. Up-sizers who are in a comfortable position and have growing families will also be active in 2026

5. Sellers are finally getting the message and pricing accordingly which will offer more enticing pricing to buyers

As always, If you’re thinking about buying, selling, or just trying to make sense of what all this means for your specific neighbourhood, feel free to reach out anytime.

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Normally Sluggish August Busier Than Usual

August usually feels like a sleepy month in real estate. Families head to the cottage, kids get ready for back-to-school, and the market takes a breather. This year was a little different. Buyers didn’t exactly storm the gates, but sales ticked up modestly, while listings grew even more. The result: a market that’s active on the surface but still firmly tilted toward buyers. Especially for condos.

The Numbers

August Sales: 5,211 homes sold in August, up 2.3% year over year

August Listings: 14,038 new listings hit the market, a 9.4% increase year over year

August Active Listings: 27,495 at month’s end—a drop from 30,215 we had in July and 31,603 we had in June - still a ton of choice for buyers.

August Average Price: $1,022,143, down 5.2% year over year. In comparison July was $1,051,719 and June was $1,101,691, so prices continue the downward trend across the board.

Chart Via https://trreb.ca/

Will the Fall Market Pick Up?

Traditionally September to November is the fall market which see’s new buyers enter the market and those that have been looking the first part of the year continue their search. The market usually pick up a bit. Although we are seeing a pick up in interest and activity in the market and sales are happening I’m certain we wont see a big increase in sales but with prices coming down I do think we will see a steady pace of sales over the next 3 months. Especially for freehold homes in the sweet spot of 1.6M or less and more so for the opening price-point as we are seeing plenty of first time home buyers or upsizes from smaller homes looking to get something more family size.

Buyers will continue to benefit from a well-supplied market. Active listings are nearly 28,000, which keeps negotiating power on their side.

Rates still sting a bit but borrowing costs have eased a bit, with average mortgage rates hovering around 4.5%- 5%, affordability remains stretched for many so a rate cut this month could help that.

Sellers are adjusting. More homeowners are accepting that 2021-style prices aren’t coming back anytime soon. Negotiation is the rule, not the exception and I am seeing more and more homes priced right rather than priced high like we were to start the year.

Still in some of the more sought after neighbourhoods with good schools, close to the Bloor Subway Line, Walkability and Parks I asm seeing the nicer move in ready homes get either quick offers or some even getting multiple offers (2-4 offers) but the selling price is what we usually expect it to sell for.

By Home Type Prices

Here’s how August shook out across property categories GTA-wide:

Detached: Avg. $1,312,240 (down -7.5% YoY in the GTA)

Semi-Detached: Avg. $980,102 (down -4.2% YoY in the GTA)

Townhomes: Avg. $860,178 (down -3.8% YoY in the GTA)

Condos: Avg. $642,195 (down -5% YoY in the GTA)

Detached homes remain the most resilient, while condos are still under the heaviest downward price pressure.

We keep telling about the condo crash but something thats not been highlighted enough is whats happened to the low rise market since its height in 2022. Click the link below to read John Pasalis’s comments.

Toronto Home Prices Down 27% From the Peak — No Quick Rebound in Sight

Economic Backdrop

TRREB highlights that Canada’s economy is “treading water.” Inflation is under control, but growth is slow, and uncertainty around tariffs lingers. A further 0.25% rate cut by the Bank of Canada later this year is possible, but it won’t dramatically change affordability overnight.

Final Thoughts

I'm not so worried about low rise Freeholds, prices have come down considerably since the peak and we are seeing plenty of interest in them especially in Toronto but even in the outer GTA when it comes to a nicely presented move in ready homes priced right.

The concern remains with condos. Especially the smaller non-family friendly ones. Just not any interest in them right now and it’s hard to say when that will change. If you are renting a 1 Bedroom and would consider entering the market by purchasing a smaller 1 Bed condo there are a lot of deals to be had with the right negotiation.

With regards to 2 & 3 Bedroom condos, they are still plentiful but noticing more and more buyers are interested and more and more sellers of them being reasonable in how they price and have adjusted expectations. Pre 2024 a 2 Bed 2 Bath condo would sell between $750K on the low end to $950K on the high depending on square feet and features, today you can find plenty in the city in the $600K - $800K range.

As always if you have any questions, concerns or want advice on buying or selling happy to chat, simply click the link below to set up a no obligation phone call.

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Buyer's Getting Active, Sellers Getting Realistic.

August 2025 Market Update – Things are happening but still at a slower than usual pace.

If June felt like the warm-up act, July was the first real sign that buyers are starting to trickle back into the show. It wasn’t a stampede, but it also wasn’t the ghost town we’ve seen for much of 2025. The numbers show a little bit of momentum building—but also that we’re still in a market where patience and pricing smarts matter a lot.

The Big Picture

Sales: 6,100 homes sold across the GTA in July—up 10.9% compared to July 2024. This is the strongest July since 2021, so yes, there’s life out there.

New Listings: 17,613 hit the market, 5.7% more than last year. More choice for buyers, but sales grew faster than listings—meaning conditions tightened just a little.

Active Listings: Still high at 30,215 which means inventory is still plenty but with the increase in sales it has come down slightly from the 31, 603 we had at the end of June 2025 which is notable only because July is usually a month where things start to slow as the kids are out of school and some buyers get distracted with holidays and other activities. Not so this year. Even for myself Ive been contacted by more buyers in July than I was in February/March which is usually when we hear from most buyers entering the spring market. It’s obvious many buyers hit pause and some have now started to enter the market.

Average Price: $1,051,719—down 5.5% year-over-year. On the month, prices held steady from June.

Takeaway: More sales + a bit of tightening but still plenty of inventory heading into what is usually sleepy August for the Real Estate Industry.

Why Sales Are Up? Three main factors:

Better Affordability – Prices are lower than in the last few years and buyers see an opportunity, especially first time homebuyers or upsizes looking to go from a smaller condo to a freehold. As an example at the height of 2021 we were hard pressed to find a handful of freehold properties for sale under 1Million in Toronto. This is important as a first time buyer can opt to put less than 20% on a purchase under 1Million by opting to use CMHC Mortgage Insurance and this option was non existent in 2021, as of this update there are 848 freehold homes available for sale in Toronto at 1Million or less, so some buyers, especially first time buyers are finally saying “let’s do this.”

Borrowing Cost Relief – Rates haven’t dropped to “cheap money” territory, but any easing is helping people qualify and feel a bit more confident.

Still, mortgage rates around 5% mean buyers are picky and sensitive to price. The market isn’t rewarding overconfidence.

Reality is Setting in for Sellers - Many sellers are realizing we are not headed for any type of rebound anytime soon. This is the market today and will continue to be into the foreseeable future. So, they are loosening their grip on what they are willing to sell for and negotiating with buyers instead of waiting for that magical offer that just wont come. Which explains, higher sales but prices have come down 5.5%.

Home Type Performance Breakdown: Here’s what happened in July by category (GTA-wide):

Detached – Avg. $1,361,660, sales up but prices still -5.1% YoY.

Semi-Detached – Avg. $1,041,359, prices -2.3% YoY.

Townhomes – Avg. $849,380, prices -7.4% YoY.

Condos – Avg. $651,483, prices -9.3% YoY.

Translation: Detached homes are moving again, semis and towns are hanging in, and condos are still under the most price pressure.

What’s Actually Selling and What’s Sitting

Well-priced homes in move-in condition that are presented with the right marketing. This means staging, professional photography, styling, painting, handy men fixing up issues, landscaping if applicable, social media and online presence. Sellers need to get buyers looking at them and take advantage of, every marketing avenue, custom property websites, flyers, photography, video, instagram ads, lifestyle videos, google ads, open houses, door knocking neighbours and of course MLS, you need them all in this market. Homes using all these resources are still moving within 2–4 weeks.

What I mean about well-priced is that the sellers that are having success are pricing at or below 2021 pricing to help attract the few buyers looking.

To put things into perspective, in 2021 every home was getting 40, 60, 80+showings in a week with a blink of an eye. Today it’s more like 3, 6, 10 if you are really a unique, very nice, move in ready home in a sought after neighbourhood thats priced right with all the marketing I mentioned. Everyone else is lucky to get 1-3 showings in a week, some will go weeks without a showing when priced wrong. If you are a condo, especially a smaller one, you can expect 2-4 showings in a month unless again you are very unique and/or priced aggressively.

Overpriced listings: Sitting… and sitting. Buyers will wait you out, they have lots and lots of options to look at. Sellers will have decisions to make come the fall market in September. Either get ahead of the market and present and price right to sell before the holidays or risk sitting into and after the holidays.

Renovation projects: Only selling if priced very aggressively—construction costs are keeping many from taking them on, investors are watching but not active, many investors or developers I hear from are asking if I know of distressed sellers and really not interested in a renovation unless it’s a steal.

Economic Backdrop

TRREB points out that the Canadian economy is “treading water.” Trade uncertainty with the U.S. is real, but housing could be the growth engine—if rates ease further. Sounds like we should not see too much activity on this front to end the year, my prediction is one .25% rate drop between now and December at most. Going into 2026 could be different but difficult to predict this far out.

Where We’re At in the Cycle

Think of the market like a restaurant that’s been 3/4 empty for months. In July, more people walked in. They’re browsing the menu, maybe ordering an appetizer, but not everyone’s committing to the three-course meal yet. That “order” moment—when prices start to climb again—needs either bigger rate cuts or a sharper drop in inventory, it feels like both will take a long while to happen.

Looking Ahead

August and September will be telling. If sales keep climbing faster than listings, we’ll see more tightening into the fall. But if more sellers rush in to list for the fall market (Sept - Dec) the balance will swing back to buyers fast. As Ive mentioned in the past I believe we will see a blip of buyer activity but for the most part this will stay a buyers market in most neighbourhoods in the GTA heading into 2026.

Bottom Line: July brought the busiest mid-summer market in four years, but prices are still softer, and negotiating power remains in buyers’ hands. Sellers with realistic expectations are making deals. Everyone else? Still waiting…

As always if you have any questions, concerns or want advice on buying or selling happy to chat, simply click the link below to set up a no obligation phone call.

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