September 2025 GTA Monthly Housing Report
Market Recovery Pauses in August
After showing good signs of momentum through the spring and early summer, demand paused in August as buyers anticipated more supply, lower prices and reduced interest rates in September. A weakening economy and the typical seasonal lull meant less competition among buyers that were active in the market in August, enabling them to negotiate prices down to their lowest level in five years.
Sales Momentum Slows: Total MLS sales increased on a year-over-year basis for the second month in a row during August, rising 2% from last year to 5,211 transactions. However, growth slowed compared to the 11% annual increase reported for July. Sales volume last month represented the second lowest August total of the past 25 years, falling 30% below the 10-year average. Year-to-date sales were down 17% from the same period last year.
New Listings Reach 5-Year High: New listings increased 9% year-over-year to 14,038 homes, the highest August level since 2020 and 7% above the 10-year average. Continued growth in new listings amid slow sales put further upward pressure on active listings, which rose 22% from last year to 27,495 units — a record high for an August period and 74% higher than the 10-year average.
Months of Supply Highest Since Financial Crisis: While the ratio of sales-to-new listings reached its highest level of the year at 37%, it fell to a 30-year low for August periods and was a full 20 percentage points below the 10-year average. At 5.3 months of supply, inventory was up from last year (4.4 months) and rose to its highest level since the Global Financial Crisis in late 2008/early 2009, reaching a 30-year high for August periods and more than doubling the 10-year average.
Prices Fall to 5-Year Low: MLS selling prices decreased 5.2% year-over-year in August to an average of $1,022,143, the lowest level since 2020. Average prices have declined on an annual basis in 26 of the past 36 months, decreasing for the past seven months in a row. Prices were down by a total of 6.6% compared to three years ago in August 2022, and by a total of 23.4% from the all-time high in February 2022. Despite the lack of growth in prices over the past three years, 10-year annual price growth averaged 5.7%.
Price Indicators
Condo Sales Fall to 22-Year Low: Sales increased compared to a year ago for detached homes (+6%) and semis/rows/towns (+2%), while condo apartment sales fell 5% annually to their lowest level since 2003. Condo sales in August were 33% below their 10-year average, while detached and semi/row/town sales were both 29% below their 10-year averages.
Detached Supply Growing Fastest: New listings for condos increased 3% annually in August, which was a slower rate of increase compared to the 6% growth for semi/rows/towns and 14% growth for detached homes. As a result, active listings at month-end grew fastest for detached homes with an annual increase of 30% to 12,523 homes (highest level since 2008), followed by 23% annual growth for semi/row/town active listings to 5,593 (record high) and 11% annual growth for condo apartment active listings to 9,105 (record high).
Detached Supply Above 5 Months for First Time Since 2008: Months of supply remained highest for condo apartments at 6.7 months in August, up from 5.7 months a year ago and nearly 2.5 times higher than the 10-year average of 2.8 months. Detached supply jumped to 5.2 months from 4.2 months last year, rising above the five-month threshold for the first time since 2008. While months of supply for semis/rows/towns also moved higher over the past year, from 3.4 to 4.1 months, it remained at a balanced level.
Detached Prices Falling Fastest: Detached prices declined the most over the past year, falling 7.5% to an average of $1.3M — the lowest level since December 2020. Average prices for semis/rows/towns fell below $900K for the first time since January 2021, decreasing 4.0% from last year to $899K. At an average of $642K, condo prices fell 5.0% annually, also reaching their lowest level since January 2021. Compared to pre-pandemic averages in August 2019, condo prices were up 12.5%, with detached prices up 35.0% and semi/row/town prices up 32.4%.
Sales Steady Month-Over-Month for Low-Rise Homes Under $600K: Sales declined between July and August, a typical seasonal occurrence, for every market segment except for low-rise homes priced under $600K, which held steady month-over-month. There were also minimal monthly declines in sales for entry-level condos priced under $500K (-3%) and high-end condos priced $1.5M-plus (-3%).
Buyers Taking Advantage of Lower Down Payments Over $1M: It appears buyers have begun to take advantage of lower down payments for homes priced up to $1.5M. Sales grew 17% annually for low-rise homes in the $1-1.249M segment, compared to a 17% decline in sales priced $900-999K that fall under the previous $1M cap for down payments of under 20%. However, the fastest growing segment for low-rise sales remained within the least expensive segment priced under $600K (+63%). In the condo market, sales of units priced under $500K more than doubled from last year (+106%), representing a 58% share of all condos sold last month. Over the past year, condo sales also grew quickly for units priced $1.5M-plus (+24%), although representing only a 2% market share.
Detached Prices in Toronto Weighed Down by Compositional Changes: While average prices for detached homes in the City of Toronto declined 10% annually in August, most of the decrease appears to have been due to a compositional shift in sales towards less expensive properties. The MLS Home Price Index (which attempts to correct for compositional changes) reported a 4.4% decline. Furthermore, the 10% price decline was at odds with the 11% annual growth in detached sales in Toronto and 4.4 months of supply, both stronger than in the 905 Region where average prices declined by a lesser amount of 7%.
Sales Rising Fastest for Semis/Rows/Towns in Toronto: Sales for semis/rows/towns in the City of Toronto experienced the largest year-over-year increase in sales of any housing category in the GTA during August at 13%. Average prices for semis/rows/towns experienced a mild 2% annual decrease, with prices holding steady in both Toronto West and Toronto Central. By comparison, average prices for semis/rows/towns in the 905 declined 5% annually.
Central Toronto Condo Market Showing Stability: The condo market in Central Toronto showed signs of stabilizing in August with sales up 3% annually and average prices down by only 2% from last year. Condo market conditions were weakest in the 905 Region, where sales fell 7% year-over-year and average prices dropped 11% annually. Condos in Peel Region had the highest inventory across the entire GTA housing market at 8.1 months of supply.
Key Takeaways
The improvement in market activity in recent months, which gained speed in July, eased up in August. However, this wasn’t entirely surprising given the undertone of a generally cautious buyer due to ongoing economic uncertainty with respect to the trade conflict with the U.S. and expectations of more favourable buying conditions arriving in the fall. With buyers more active than expected during July, they decided to take a pause during August and enjoy the remaining weeks of summer. Nonetheless, sales managed to post a small annual increase last month, with the underlying recovery trend still intact.
Following weaker-than-expected employment data released for August in both Canada and the U.S., financial markets are pricing in about 90% odds of a quarter-point interest rate cut by the Bank of Canada on September 17th. The 65,000 jobs shed in Canada last month was the biggest loss since January 2022, pushing the unemployment rate up to 7.1% — highest since May 2016 (excluding COVID-19). With inflation running at under 2% and Canada backing away from tariff retaliation, the slowing job market is prompting bets that the Bank of Canada lowers interest rates by a total of 50-75 basis points by the end of the year.
Faced with ample supply, declining prices and increased chances of further interest rate cuts in the months ahead, buyers are anticipating further improvements in affordability, resulting in little urgency to act at the moment. However, those that are active in the market are benefiting from improved negotiation power, striking deals at prices not seen in over five years.
While elevated inventory levels will continue to limit competitive pressure among buyers, expect conditions to begin firming up in the weeks ahead as demand responds to the recent reduction in prices and upcoming interest rate cuts. The softening job market will keep buyers cautious, but there is a massive accumulation of pent-up demand waiting on the sidelines.
It appears that most of the recent pull back in momentum in the market came from within the 905 Region, as sales outperformed in the City of Toronto during August across all housing types, with relatively lower levels of inventory (months of supply) across the board. Of particular note was the improvement seen within the downtown Toronto condo market, which is starting to attract demand again following a 20% price correction from the market peak that has brought prices back to 2019 levels.
