Current Market Conditions

The Toronto Real Estate Market has been in a fairly consistent state throughout 2025. While September showed an 8.5% increase in sales compared to last year, this is more of a modest rebound than a sign of a major shift. The market has generally been steady, with activity improving slightly in recent months, but overall optimism remains neutral.

The average home price in the GTA sits at $1,059,377, down 4.7% year-over-year. This reflects a market where affordability has improved somewhat, yet buyers and sellers remain cautious. For most of 2025, the mood has been balanced: buyers are encouraged by lower rates and slightly better affordability, while sellers are adjusting expectations in response to softer prices and longer selling times.

Condo demand, however, has been softer than the freehold market. Smaller “shoebox” condos under 500 square feet have fallen out of favor. Many of these were tied to the short-term rental market, which has become far less profitable, while long-term tenants are often unwilling to rent such small spaces. As prices on these units decline, they set lower benchmarks for the next size up, which then ripple through larger units as well. This chain reaction is pulling overall condo values downward and putting disproportionate pressure on the condo market compared to houses.

Link below for previous Toronto Housing Market Reports

• Toronto Housing Market Report – September 2025
• Toronto Housing Market Report – August 2025
• Toronto Housing Market Report – July 2025
• Toronto Housing Market Report – June 2025
• Toronto Housing Market Report – May 2025
• Toronto Housing Market Report – April 202

Demand and Interest Rates

The Bank of Canada’s September 2025 interest rate cut has improved affordability, lowering monthly mortgage payments for many households. This has opened the door for more buyers to consider entering the market.

Demand has not yet shown a significant increase, as buyers remain cautious and are still assessing the impact of these changes. Lower borrowing costs are a positive step, and with the potential for further cuts later this year, activity could gradually build as confidence improves.

That said, demand is not evenly spread across the market. Freehold homes in good condition remain relatively more desirable, while the condo segment overall continues to face weaker demand. Some investors who purchased pre-construction condos with the intent to flip are also looking to sell, adding further supply to this category and keeping conditions more challenging than in the freehold market.

Supply of Homes

The Toronto real estate market continues to offer a wide range of options for buyers, with active listings up nearly 19 percent compared to last year. In September, new listings reached 19,260, a 4 percent year-over-year increase. This elevated supply is one of the main reasons average selling prices have adjusted downward by almost 5 percent compared to 2024.

It is also taking longer for homes to sell, with the average days on market rising from 42 to 51. Well presented homes that show good value compared to nearby properties are still moving more quickly. Presentation matters, a clean, tidy, updated home that feels move-in ready, paired with a competitive price, continues to attract serious buyers.

For buyers, the added supply and longer selling times mean more choice and negotiating power than in previous years.

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Market Outlook

Looking ahead, the Toronto real estate market is expected to remain stable through the end of 2025. Lower borrowing costs and slightly reduced home prices are creating better entry points for buyers than at almost any point during the past five years. For sellers, competition is higher, but well-prepared and well-priced listings continue to attract offers.

Key Takeaways

• Average home price Toronto October 2025: $1,059,377, down 4.7 percent year-over-year
• GTA housing sales October 2025: 5,592 sales, up 8.5 percent compared to last year
• More listings and longer selling times mean buyers hold more negotiating power
• Homes that present strong value compared to nearby listings still sell well
• Condo demand is weaker than freehold homes, with price declines in smaller units rippling up to larger condos
• Interest rate cuts are creating real affordability improvements, boosting long-term potential