Ontario Home Prices Are Down 6.7% – But Is This The Bottom Or Just A Pause?

Ontario home prices have dropped 6.7% year-over-year, with condos down ~8.8% and townhouses down ~7.4%. We break down by property type, explore whether we’re at the floor, and what rate cuts could mean for buyers and sellers.

The average home price in Ontario fell 6.7% year-over-year to approximately $781,500 in September 2025. nesto.ca
Breaking it down: single-family homes also down ~6.7%, townhouses/multiplexes down ~7.4% to ~$627,900, and condos down ~8.8% to ~$518,700. nesto.ca
Inventory is elevated, sales-to-new-listings ratios are weak, suggesting a buyer-tilted market.
With the Bank of Canada beginning to cut rates, there is speculation this could be a “pause” rather than a long-term decline—but risks remain.
For buyers, this is possibly one of the better windows of negotiation in years–but “waiting for the bottom” still carries risk.

1. A Breakdown by Property Type

The broad “average home price” number doesn’t tell the full story. Here’s how the segments stack up in Ontario (September 2025):

Single-family homes: ~$866,200, down 6.7% YoY. nesto.ca
Townhouse/Multiplex: ~$627,900, down 7.4% YoY. nesto.ca
Condominiums: ~$518,700, down 8.8% YoY. nesto.ca

What this shows:

Smaller-footprint properties (condos, townhouses) have taken larger percentage drops.
Detached homes are also down, but the relative drop is similar to the overall average.
Buyers in the condo/townhouse space may have more room to negotiate or wait – but also face steeper risks of further softening.

2. Why Are Prices Down?

Multiple forces are at work in Ontario right now:

Elevated inventory. More homes listed means more choice for buyers, less urgency. nesto.ca
Sales-to-New-Listings Ratio (SNLR) low. As reported, SNLR in Sept 2025 was ~34% in Ontario. A ratio under ~40% often signals a buyer’s market. nesto.ca
Affordability crunch. Even with price drops, mortgage rates and stress test scenarios mean many buyers remain cautious.
Macro risks. Economic uncertainty, inflation, job concerns all temper confidence.
Segment oversupply risk: Especially in condo space where new-build completions and investor-buying have slowed. (See broader commentary on Ontario market reset.) Canadian Mortgage Trends

3. Are We Near The Bottom… Or Just A Pause?

This is the million-dollar question for Ontario buyers and sellers alike. Here are major signs pointing both ways.

✅ Arguments that we are near the bottom

Percent drops are now in the high single digits, not double digits (so the “major crash” phase may be behind us).
The Bank of Canada has signalled cuts, which could improve affordability and boost demand.
With lower prices and more inventory, the buyer-negotiation window is wider than it has been in years.
Fundamental demand (immigration, population growth, limited supply) still exists in Ontario though tempered.

⚠️ Arguments that this is just a pause

Even after the drop, the average price (~$781,500) remains high in absolute terms for many buyers.
If rates do not fall significantly, or if economic headwinds worsen, prices might drift lower or stagnate.
Certain regions or property types (condos, higher-priced suburbs) may still face oversupply and weaker demand.
Historical precedent: bottoms often form only after a long consolidation period, not a sharp bounce.

Bottom line: If you are buying because you need a home (rather than purely speculation), this may be a favorable moment. If you are waiting for a “safe” bottom to buy for investment, there is still risk.

4. What This Means for Buyers & Sellers

For Buyers

Leverage is back. More inventory + less price pressure means you can negotiate better.
Focus on fundamentals. Location, condition and total cost of ownership matter more than “catching the bottom”.
Watch your financing. Ensure you can qualify given stress-test and scenario risk, especially if rates move upward again.
Be prepared for sideways years. Realistic expectations: You might see small gains or flat market before strong growth.

For Sellers

Pricing strategy is more important than ever. Overpricing can lead to sitting on market for months.
Condition and presentation matter. With more inventory, homes that don’t stand out drop in value faster.
Know your risk-reward. If you don’t need to sell right now, waiting for clearer recovery signs may be valid.
Market regional variations. Some Ontario sub-markets will perform much better than others (e.g., hot urban cores vs slower rural areas).

5. Outlook: What to Watch for in Late 2025 & 2026

Interest-rate cuts. If the Bank of Canada lowers rates meaningfully, affordability improves and demand may pick up.
Supply growth/stabilization. If new construction slows or listings drop, supply-demand balance may tilt back toward sellers.
Segment divergence. Detached homes may recover sooner; condos may lag due to investor pull-back and oversupply.
Regional divergence. Ontario is large – markets in Toronto/GTA behave differently than smaller cities and rural zones.
Macro shocks. A recession, major job losses, or global economic event could delay recovery or cause deeper drops.

6. Final Word

Ontario’s housing market finds itself at a crossroads: prices have clearly dropped (6.7% on average) and some segments are down even more. That creates a window of opportunity for buyers—but not one without risk.

If you are ready to buy, financially stable, and focused on long-term value rather than short-term gains, you may find better conditions today than in years. If you’re waiting for clear signs of a recovery or a rebound in prices, you may need patience.

In trade-off terms: this might not be the absolute bottom, but it is one of the better buying points in recent years.

Subscribe to our newsletter:

Get weekly insights on home prices, real estate trends, and breaking news in Canada’s housing market.
Stay informed. Stay ahead.

Canada Housing Market