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Home sales in the Greater Toronto Area continued to decline for a third straight month, with prices also moving lower as economic uncertainty kept buyers cautious. Sales fell to their lowest level since mid-year, while the home price index recorded a monthly and annual decline. For the full year, sales dropped sharply even as new listings increased, leading to improved affordability. Lower prices, easing mortgage rates, and recent interest rate cuts by the Bank of Canada have helped balance the market, though buyer confidence remains restrained.
Home sales across the Greater Toronto Area declined for the third consecutive month, with both transaction volumes and prices under pressure as buyers remained cautious due to ongoing economic uncertainty. Data released by the Toronto Regional Real Estate Board showed that seasonally adjusted sales slipped by 0.4% in the final month of the year compared to the previous month, reaching 5,624 units. This followed similar declines in the two preceding months and marked the weakest sales level since mid-year. Advertisement
Prices also continued to soften. The board's home price index fell 0.7% on a month-on-month basis after seasonal adjustment, bringing the index level to CAD 962,300, equivalent to about USD 697,066. The downward trend reflects a combination of slower demand and rising supply in the market.
Looking at the full year, housing activity remained subdued. Total home sales during 2025 were 11.2% lower than the previous year, while new listings increased by 10.1%. The average selling price for the year declined by 4.7%, indicating that buyers gained greater negotiating power as inventory levels improved.
On an annual basis, prices in the final month of the year were down 6.3% compared to the same period a year earlier. Sales volumes fell 8.9% year-on-year, even as new listings edged up by 1.8%, reinforcing the shift toward a more balanced market.
The Greater Toronto Area, which includes Toronto and four surrounding regional municipalities, has seen affordability conditions improve over the past year. According to the real estate board's leadership, lower selling prices combined with easing mortgage rates made homes more accessible in 2025. The board also indicated that these conditions could support a recovery once households gain confidence in the broader economy and labour market, allowing pent-up demand to return.
Monetary policy has also played a role in shaping market sentiment. The Bank of Canada has reduced its benchmark interest rate to a three-year low of 2.25% in an effort to support economic activity. The economy has faced pressure from a prolonged trade dispute led by the United States, which has weighed on growth and consumer confidence, including in the housing sector.
Source Reuters
5th Jun, 2025
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