2025: The Market in Review — and What Comes Next
By the end of November, TRREB had reported 53,813 home sales across the Greater Toronto Area in 2025. December typically contributes an additional 3,000 to 4,000 transactions, which places full-year sales on track for approximately 57,000 to 58,000 homes. This year will likely end up as the lowest number of overall home sales in recent memory.
We saw prices drift downward in all segments, yet they remain high enough that monthly carrying costs and down payments continue to stretch household budgets. Even with easing interest rates compared with the peak, many buyers stayed on the sidelines, waiting not just for better rates but for confidence that their move makes financial sense.
This is a market that’s characterized by caution. Buyers are taking their time, looking at options, and stepping in only when a property fits their budget and lifestyle. Sellers, meanwhile, have had to adjust expectations, especially where inventory is plentiful and competition is high.
In conversations with clients, I’m often asked whether lower interest rates will bring buyers back. Rates matter, but they aren’t the whole story. What’s held many people back has been the broader economic picture. Affordability, job security, and the day-to-day cost of living. Until households feel more confident about their future and finances, lower rates won’t be enough to change behaviour.
Looking ahead, it will be a question of whether broader confidence returns to the housing market. 2026 is likely to be a year of continued downward adjustments rather than a sharp recovery, shaped more by overall economic conditions than by interest-rate forecasts alone.
Condos: A Tale of Two Markets
The condo market across the GTA remained cool through 2025, with downward pressure on prices and little urgency from buyers. Activity slowed most noticeably in segments that had relied heavily on investors in recent years.
Bachelor and smaller one-bedroom units were the most affected. With investors largely absent, demand for these units thinned, listings accumulated, and pricing had to adjust. Many of these condos were designed around rental economics rather than long-term livability, and without investor participation, they struggled to attract the same level of interest.
Larger condos told a somewhat different story. Two-bedroom units and larger, particularly those with parking, held up better, reflecting demand from end-users rather than investors. However, even this segment operated firmly in buyer’s market territory. Sales still required competitive pricing, realistic expectations, and patience.
The condo sector has been the weakest part of the housing market this cycle, driven by a decline in investor demand and a period of oversupply. This segment is still working through that adjustment, and that recovery is likely to be very slow and uneven rather than broad-based and quick.
The next chapter for condos in the GTA
What’s easy to miss is the longer-term tension underneath all of this. Condos remain too expensive for demand to surge, yet not expensive enough for builders to justify new projects, given today’s costs for materials, labour, financing, and government fees.
That combination has slowed new construction entering the pipeline. If no new construction comes to market while demand gradually returns, the market can shift from today’s excess inventory to a shortage of supply faster than many expect. That’s the next chapter worth watching, and where upward price pressure is more likely to re-emerge in a few years.
As always, I’m available if you’d like to talk through how these trends apply to you.
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