It wasn’t long ago that Toronto’s housing market was breaking records every month.
In February 2022, the average home price in the Greater Toronto Area (GTA) peaked at $1.33 million, the highest in history.
Fast forward to fall 2025, and that figure has dropped to roughly $1.06 million, marking a 20%+ decline in just three years.
The data paints a clear picture: the GTA’s once red-hot housing market has cooled dramatically, shifting from an overheated seller’s market to a more balanced environment.
Source: Toronto Regional Real Estate Board (TRREB)
📉 Average GTA Home Prices: 2022 vs 2025
Total drop since 2022: approximately $276,800 (or -20.7%).
Detached homes saw the biggest correction, while condos proved to be the most resilient segment.
🏘️ Price Comparison by Property Type
Here’s how each housing category has performed since the 2022 peak, based on TRREB and CREA data:
Sources: TRREB Market Watch September 2025, CREA Regional Statistics
💸 Why Prices Have Fallen So Sharply
1️⃣ Rising Interest Rates
Between 2022 and 2024, the Bank of Canada hiked rates from 0.25% to 5%, sending mortgage costs soaring.
Even with a September 2025 rate cut, many buyers remain cautious, keeping downward pressure on prices.
2️⃣ Higher Inventory Levels
Active listings in the GTA rose 23% year-over-year as more homeowners tried to cash out before further declines.
The shift has created a more balanced market where buyers can negotiate.
3️⃣ Affordability Wall
Despite price declines, affordability remains a challenge.
RBC’s latest Housing Affordability Index shows it takes an income of around $220,000 to comfortably buy an average Toronto home, out of reach for most households.
4️⃣ Investor Retreat
Investors who bought pre-construction condos in 2021–2022 are facing longer resale timelines and higher borrowing costs, leading to increased assignment listings.
🏡 Where the Market Is Holding Up Best
Not every segment of the GTA is seeing steep declines.
Some areas have held their ground, particularly Durham Region, Halton Hills, and parts of East Toronto, where supply remains tight and family demand is stable.
Condos in central Toronto and Mississauga have been buoyed by rental demand and international students, helping prevent a deeper dip.
Source: Urbanation GTA Condo Report 2025
📊 The Pandemic-Era Rollercoaster
The GTA market over the last three years has gone through one of the most dramatic cycles in Canadian history:
- 2020–2021: Pandemic-fueled boom, record-low interest rates, and remote work migration.
- 2022: Peak pricing and bidding wars, followed by aggressive rate hikes.
- 2023–2024: Correction phase with reduced buyer activity and climbing listings.
- 2025: Market stabilization – slower, but more predictable conditions.
For buyers, it’s finally a market that rewards patience and research rather than panic and FOMO.
🔮 What’s Next for 2026?
Economists expect flat to modest price growth heading into 2026.
While the correction appears to have bottomed out, higher debt levels and cautious buyers may keep prices range-bound for another 6–12 months.
However, with immigration still strong and demand for rentals steady, long-term fundamentals in the GTA remain positive.
🧭 Final Takeaway
From its 2022 peak to 2025, the GTA housing market lost over one-fifth of its value – a dramatic correction that few expected after years of relentless growth.
Detached homes took the hardest hit, while condos and townhouses held up better.
But after three years of adjustment, the region is finally showing signs of balance.
For those waiting for a more stable market – this is it.
Prices may not be cheap, but they’re the most realistic they’ve been in years.
References:
- Toronto Regional Real Estate Board (TRREB) – September 2025 Market Watch
- Canadian Real Estate Association (CREA) National Data
- Urbanation GTA Condo Market Report
- RBC Housing Affordability Index 2025
- Bank of Canada Interest Rate Decision – September 2025
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