Market Update: September 2025
| Hello! As promised, we’ve compiled some information for you about what’s happening in the ever-fascinating Toronto real estate market. As we move into fall, the market continues to navigate shifting economic conditions, seasonal fluctuations, and evolving buyer sentiment. While prices remain under pressure, activity levels are showing resilience in key segments. Scroll down for the details! Sales & Inventory Trends > Sales are up compared to last year, though the pace slowed over the summer. August sales rose 2.3% year-over-year but decreased 14.5% month-over-month—a seasonal trend as buyers and sellers shifted their focus to summer holidays. > New listings also increased, contributing to higher inventory levels. In fact, for 8 of the last 12 months, sales have lagged behind 2024 levels, largely due to this abundance of supply not just in Toronto but throughout the GTA. > The Sales-to-New-Listings ratio now sits at 34.6%, with three straight months of increases – an encouraging sign for market stability, especially during a period when activity usually softens. Price Movements & Affordability > The average sale price in August was $1,022,143, down 5.2% year-over-year. > Most transactions are clustering in the $1.05M–$1.125M range – a level we’ve consistently hovered around since mid-2022. > Semi-detached homes in the 416 market stood out, with sales up an impressive 48% year-over-year. This shift is fueled by affordability, new CMHC rules, and buyers bypassing condos in favour of semis or row homes.(Effective December 2024: CMHC started insuring mortgages with less than 20% down payment for homes up to $1.5m from $1m, and increased the amortization period from 25 – 30 years, giving buyers more buying power with lower monthly payments) > While prices remain under downward pressure, the reality is that we’re settling into a “new normal” range, rather than the unsustainable highs of early 2022. Economic Drivers & Interest Rates Interest rates: In September, the Bank of Canada cut the key rate to 2.5% (down 0.25 points). Economists suggest another cut may follow in October as Canada grapples with slow growth and trade strains. Inflation: Currently within the BoC’s target range. This stability supports further policy easing, which would provide additional relief to buyers. Employment: Ontario remains one of the provinces hardest hit by trade pressures, though job numbers appear to be stabilizing outside of heavily exposed industries. Buyer & Seller Dynamics Buyers: Cautious but re-engaging. Many are waiting for further rate cuts, while others are stretching beyond condos into semi-detached homes and entry-level freeholds, thanks to CMHC changes. For those ready to act now, conditions are favourable with ample choice and room to negotiate. Sellers: Success hinges on realism. Properties that are priced in line with today’s market – and that are the least expensive, most unique, or most exceptional – will move. Overpricing risks stagnation and ultimately leads to price cuts. Offer strategies: Across most of Toronto, offer dates are now a last resort. The one exception is the east end, where aggressive underpricing and bidding wars remain more common. Looking at the Bigger Picture > Since the peak of Feb 2022 ($1.334M), values have corrected about 23.4%. Similarly, after the 2017 stress test, values fell 20% before recovering within three years. > Removing those peaks, today’s price levels are in line with longer-term trends. In other words, we are where we should be, not in freefall. > A full rebound from this cycle could take 3–5 years, particularly for the condo market, but activity remains strong even as pricing adjusts. Key Takeaways > Affordability is driving the market. Buyers are prioritizing value and making strategic moves into more attainable freehold homes. > Rates are likely to ease further, supporting buying power in the months ahead. > Inventory remains high, putting downward pressure on prices and requiring sellers to stay realistic. > This is a buyer’s market overall, but conditions vary widely by neighbourhood and property type. Final Word For buyers, today’s market presents a rare opportunity: more choice, more negotiating power, and the tailwinds of easing borrowing costs. For sellers, success means acknowledging the “new world” we’re in – not the peak pricing of 2022 – and positioning your property competitively to attract today’s cautious but serious buyers. Need some advice? Reach out 🙂 |
