Toronto remains one of the most competitive and expensive real estate markets in Canada, but it’s currently in a cooling phase. Home prices are experiencing modest year-over-year declines, especially in the detached segment, while condos and townhomes remain relatively stable thanks to investor interest and affordability compared to low-rise housing.
Here’s where the market stands right now:
🏠 Average Toronto Home Prices – August 2025
According to the latest Toronto Regional Real Estate Board (TRREB) data:
| Property Type | Avg. Price | YoY Change |
|---|---|---|
| Detached Home | $1,447,200 | ↓ 5.9% |
| Semi-Detached | $1,112,500 | ↓ 2.6% |
| Townhouse | $947,800 | ↓ 0.8% |
| Condo Apartment | $742,100 | ↑ 1.9% |
📉 Overall average price across all home types: $1,118,600
📊 Down 3.2% year-over-year, and 0.3% month-over-month
🔎 Key Insight: Detached homes continue to see the sharpest price correction, while condos are gaining traction—buoyed by rental demand from students, new immigrants, and downsizers seeking affordability.
Source: TRREB Market Watch – August 2025
🧾 Sales Activity & Inventory
As of July 2025:
- Sales: 6,420 residential transactions (↓ 7.4% YoY)
- New Listings: Up 19.5% YoY
- Active Listings: 21,310 (↑ 21% YoY)
- Sales-to-New Listings Ratio: 45% (buyer-leaning balanced market)
- Average Days on Market: 27 days
🔍 Takeaway: Inventory is rising faster than sales, giving buyers more leverage while softening seller power.
Source: TRREB Stats Centre – August 2025
🧊 Why Toronto’s Market Is Cooling
Several major factors are driving the current slowdown:
- High mortgage rates are continuing to erode affordability
- Investor pullback, especially in pre-construction and luxury segments
- Wave of condo completions, creating a short-term oversupply
- Buyer fatigue after years of bidding wars and price surges
According to Urbanation, 65% of GTA condo landlords are now offering incentives like free rent, gift cards, or parking to secure tenants, up from 63% last month.
🏦 Interest Rates Hold at 2.75%
In its July 2025 announcement, the Bank of Canada held its key interest rate steady at 2.75%, citing persistent core inflation and slowing global economic growth.
📌 While this pause provides a bit of predictability, borrowing costs remain historically high, limiting purchasing power and keeping demand in check.
Source: Bank of Canada – July 2025
🧱 Housing Supply & Government Action
Toronto continues to prioritize supply through several policy moves:
✅ Transit-Oriented Communities (TOCs) are being fast-tracked
✅ Shared equity pilot programs for first-time buyers are expanding
✅ Missing middle projects like triplexes, laneway homes, and multiplexes are scaling up
✅ Modular and rapid-build housing initiatives are adding units faster than traditional builds
📍 Despite progress, supply still lags behind the city’s population growth—especially for family-sized housing and affordable low-rise options.
🔮 Toronto Real Estate Outlook – Late Summer 2025
Here’s what to expect in the coming months:
- Continued softening in the detached and luxury home segments
- Stability or slight growth in the condo market
- Increased buyer leverage due to higher inventory
- Fewer bidding wars, with sellers adjusting expectations
- More price reductions and seller-side incentives
📌 Bottom Line: The Market is Cooling, Not Crashing
Toronto’s real estate market is undergoing a healthy correction after years of rapid growth. The shift toward a more balanced, buyer-friendly market may offer the best negotiating opportunities buyers have seen in years.
✅ Final Thoughts
- Buyers: Late summer 2025 could be your chance to secure a deal- especially in detached and semi-detached markets.
- Sellers: Pricing competitively, staging your home well, and offering incentives (like flexible closing or inclusions) can help you stand out in a crowded market.
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