Toronto Home Prices Continue Downward Slide as Listings Surge in Buyer’s Market
Toronto’s housing market is facing a deepening slowdown, with home prices declining for the ninth consecutive month in August 2025, driven by a surge in listings and persistent economic uncertainty. The benchmark price of a home in Canada’s largest city fell 0.1% from July to C$978,100 (US$709,000), according to the Toronto Regional Real Estate Board (TRREB), marking a 4.6% drop year-over-year. As buyers gain leverage in a market flooded with inventory, the city’s real estate landscape is shifting, offering opportunities but also challenges for homeowners and investors alike.
A Market Flooded with Options
The data paints a clear picture of a buyer’s market. New listings in August jumped 3.9% month-over-month on a seasonally adjusted basis, while sales dipped 1.8%, ending a four-month streak of rising transactions. Active listings soared 22% compared to August 2024, reaching levels not seen in a decade, according to Better Dwelling. The sales-to-new-listings ratio (SNLR) fell to 39.7%, well below the 40% threshold that signals a buyer’s market, giving purchasers more negotiating power and pushing average sale prices to 98% of asking prices, down from 99% a year ago.
Key metrics from TRREB and other sources include:
- Benchmark Price: C$978,100, down 0.1% month-over-month and 4.6% year-over-year.
- Average Sale Price: C$1,074,425, a 0.7% annual decline.
- Active Listings: Up 22% from August 2024, with 22,653 homes available.
- Sales Volume: 4,988 homes sold, down 2.1% year-over-year and 1.8% from July.
- Days on Market: Increased to 41 days, up from 36 in July 2024.
The condo market, a significant segment in Toronto, is particularly soft, with sales down 2% and average prices dropping 4% year-over-year to C$675,000, according to analyst John Pasalis on X. This glut of inventory, especially in condos, is exerting downward pressure on prices, with some properties selling at losses in desirable neighborhoods.
Economic Pressures and Buyer Hesitancy
The persistent decline in Toronto’s home prices coincides with broader economic challenges. U.S. President Donald Trump’s tariffs on Canadian goods, particularly impacting Ontario’s automotive and steel sectors, have weakened consumer confidence, as noted by Bloomberg. The Bank of Canada’s decision to hold its policy rate steady at 3.75% through July 2025, after seven rate cuts in 2024 and early 2025, has kept borrowing costs elevated, deterring some buyers despite improved affordability.
“A household earning the average income in the GTA is still finding it challenging to afford the monthly mortgage payment associated with an average-priced home,” said Jason Mercer, TRREB’s chief information officer. “Further relief in borrowing costs would see an increased number of buyers move off the sidelines to take advantage of today’s well-supplied market.”
The condo sector, heavily reliant on investors, is struggling most, with active listings up 40% and months of inventory rising to 6.4 in February 2025, per Realosophy Realty. Meanwhile, low-rise homes in areas like Durham and central Toronto remain competitive, with 50% of sales still exceeding asking prices, highlighting a bifurcated market.
Background: A Shift from Pandemic Peaks
Toronto’s housing market has been cooling since its pandemic-era peak in early 2022, when low interest rates and high demand drove prices to unsustainable levels. The benchmark price, which tracks a “typical” home, has reverted to October 2021 levels, moving sideways for three years. This follows a 17.5% decline from the 2022 high, according to Wolf Street. The influx of listings, up 48.6% year-over-year in January, reflects seller motivation amid economic uncertainty, including volatile U.S. trade policies and slowing population growth due to tightened Canadian immigration rules.
The condo market, in particular, faces pressure from an oversupply of new units, with 23,095 new condo registrations in the year ending Q1 2025, a 21% increase, per Urbanation. This has led to longer selling times and more price negotiations, particularly for smaller units favored by investors.
Potential Impact and Next Steps
The surge in listings offers buyers more choice and bargaining power, but it spells trouble for sellers, who may face longer wait times or lower sale prices. If inventory continues to outpace demand, further price declines are likely, especially in the condo segment. However, TRREB forecasts moderate price growth in 2026 if interest rates fall further, with some analysts predicting a 2–2.75% Bank of Canada rate by late 2025.
For now, buyers are advised to monitor mortgage rates and act strategically, as affordability improves but stress test requirements remain a hurdle. Sellers may need to price competitively or offer incentives to attract buyers in this crowded market. The federal government’s new mortgage rules, effective December 2025, allowing 30-year amortizations for first-time buyers and insured mortgages up to $1.5 million, could stimulate demand, particularly for new builds.
Conclusion
Toronto’s housing market is firmly in buyer’s territory, with sliding prices and a flood of listings creating opportunities for those ready to act. While economic uncertainties and high borrowing costs keep many on the sidelines, the market’s shift offers a window for savvy buyers to negotiate deals. As Toronto navigates this challenging phase, the balance between supply and demand will shape its real estate future, with all eyes on interest rates and economic stability in 2026.