June 2025 GTA Monthly Housing Report

Record High Inventory Weighs on Market

There was some evidence in May that demand began to slowly move off the sidelines as buyers become somewhat accustomed to the current economic uncertainty from the U.S. trade conflict. However, sales remained exceptionally low while supply reached a record-high, creating buyers’ market conditions and putting mild downward pressure on prices. Remarkably, prices have continued to hold up well relative to the current market weakness.

Sales Begin to Improve in May: Total MLS sales increased 12% between April and May to reach 6,244 transactions — the best month for sales since October 2024. Compared to a year ago, sales decreased 13%, which was an improvement from annual declines of over 20% recorded in each of the previous three months. Nonetheless, sales remained weak with activity falling 31% below the 10-year average and representing the slowest May period in 25 years (outside of COVID-19 in 2020).

Active Listings Surpass 30,000 for First Time: New listings moved in the opposite direction as sales during May, rising 14% year-over-year to 21,819 homes — the highest May total since 2017. This led to a further accumulation in active listings on the market, which surpassed 30,000 for the first time ever. At 30,964 homes, active listings at the end of May were 42% higher than last year and 82% higher than the 10-year average.

Supply Reaches 5 Months: The sales-to-new listings ratio of 29% was at its lowest May level in over 30 years and well below a balanced level of approximately 40-60%, signalling a continuation of buyers’ market conditions. Months of supply jumped to 5.0 from 3.0 months last year, more than doubling the 10-year average of 2.1 months of supply.

Prices Down 4% From Last Year: Buyers were able to negotiate slightly lower prices in May as the average home sold for 98.8% of asking price. This resulted in a modest year-over-year decrease of 4.0% in average selling prices. Prices have declined slowly during the past three years, decreasing by a total of 7.7% since May 2022 to reach an average of $1,120,879. Compared to five years ago, average prices were up 31%, with 10-year average growth of 6.1% per year.

Condo Sales Drop 25% From Last Year: Condo apartment sales fell more than twice as fast as other forms of housing in May, with activity dropping 25% annually to 1,482 units. Detached sales declined 11% from a year ago to 2,998 homes, while sales for semis/rows/towns declined the least with a 7% annual decrease to 1,688 homes.

Condo Active Listings Surpass 10,000 Units: Detached active listings grew 45% over the past year to reach their highest May level since 2008 at 13,770 homes. Active listings for semis/rows/towns saw the largest annual increase of 53% to reach 6,345 homes — a record high. Active listings for condo apartments continued to break new records in May, rising 30% from a year ago to surpass 10,000 units for the first time in history.

Over 7 Months of Supply for Condos: For the first time since the Global Financial Crisis in late 2008/early 2009, condo inventory rose above seven months of supply (7.1) during May. Detached inventory of 4.6 months of supply was unchanged since February, but up significantly from a year ago (2.8 months). Semis/rows/towns were the only category of housing with a balanced level of supply at less than four months (3.8).

Condo Prices Down 12% Since 2022: Average prices declined over the past year for all categories of housing, led by a 6.4% decline for condo apartments (to $683,413) and followed by a 5.4% decline for detached homes (to $1,425,264) and a 4.8% decline for semis/rows/towns (to $975,247). In all cases, average prices were at their lowest May level since 2021. The three-year decline for average prices was 12.0% for condo apartments, 8.3% for semis/rows/towns, and 7.5% for detached homes.

High-End Condo Sales Lead Monthly Sales Growth: Between April and May, low-rise home sales were up across all price segments, led by a 22% month-over-month increase in activity between $700–799K. At the upper end of the market, sales of $2M+ low-rise homes grew 16% from April to May, while condos priced $1.5M+ saw 44% growth over the same period. Condos selling for $1.5M+ represented only 3% of condo sales, while low-rise homes selling for $2M+ were 9% of the low-rise market.

Affordability Trends & Regional Variations

Entry-Level Sales Up More than 70% from Last Year: Over the past year, sales for entry-level homes experienced extremely strong growth. While representing only 3% of low-rise sales, homes under $600K recorded a 74% year-over-year increase in activity. Similarly, condo sales under $500K saw 75% annual growth, comprising 21% of condos sold in May. All price ranges for condos under $900K experienced year-over-year growth in sales activity.

Sales Increase for Low-Rise Homes in Toronto East: Sales in the City of Toronto continued to perform better than in the 905 Region of the GTA in May, with detached sales in Toronto decreasing 8% annually (compared to a 12% decline in the 905) and sales of semis/rows/towns increasing 2% (compared to an 11% decline in the 905). There were pockets of growth for sales in Toronto during May, including a 2% annual increase in detached sales in Toronto East, and annual increases for semi/row/town sales of 6% in Toronto East and 11% in Toronto West. Across all housing types, Toronto East had the lowest months of supply.

Months of Supply Higher in 905 Region: Annual price declines for detached homes and semis/rows/towns were generally aligned in the City of Toronto and 905 Region in May. However, condo prices declined more in Toronto than in the 905 over the past year (-7% vs. -4%). With months of supply higher in the 905 than in Toronto across all housing types, prices may face relatively more downward pressure in the 905 in the coming months if sales remain sluggish. Condos in Peel and York Regions had the highest inventories in the GTA at 7.5 and 7.6 months, respectively.

Key Takeaways

While it isn’t unusual for sales to rise between April and May due to seasonal factors, the 12% increase last month was encouraging as it potentially signalled the beginning of some stability for demand. Home sales have been impacted this year by heightened economic uncertainty as a result of a volatile trade conflict initiated by the U.S.

Theoretically, housing demand should be rising as reduced prices and lower interest rates this year have led to an improvement in homeownership affordability. Furthermore, the rapid level of population growth over the past three years has created an unprecedented amount of demand for housing — the vast majority of which has been directed into the rental market, but a portion is on the sidelines waiting to enter the ownership market.

Buyers are feeling no pressure at the moment as they face a record amount of supply on the market. However, prices have experienced only a minor decrease as many sellers continue to hold firm on pricing expectations. It is also a signal of very little amounts of distressed sales occurring, despite the record number of mortgages renewing at higher rates this year.

Looking Ahead

The data is indicating that this is the strongest buyers’ market of the last 30 years. Historically, buyers’ markets don’t last long, and the next few months could represent the best buying opportunity in years. Prices may continue to face further mild downward pressure in the near-term, but a large correction is unlikely given their proven resiliency.

The condo market is expected to continue experiencing the weakest conditions this year as completions remain at a record high. However, with presale activity and construction starts falling to multi-decade lows, completions will begin to pull back later next year and provide support for the market.

On June 4, the Bank of Canada held its key policy rate unchanged at 2.75% for the second time in a row, pointing to “unusual uncertainty” regarding the economic outlook and path for inflation given the trade situation with the U.S. While economic growth in the first quarter was stronger than expected at 2.2%, it was mainly due to exports being pulled forward into the U.S. ahead of tariffs, as well as inventory accumulation in anticipation of higher costs going forward. The economy is expected to be considerably weaker the rest of the year.

With the economy expected to weaken, and inflation currently subdued at under 2%, economists are forecasting that the Bank of Canada will cut interest rates by another 50–75 basis points by early 2026, with the next meeting in July pegged at about a 50% chance of a rate cut. This will lead to some reduction in variable rate mortgages. However, fixed rate mortgages have been edging up recently as bond yields have been moving higher.