TRREB August 2025 Market Review

The Greater Toronto Area (GTA) housing market tapped the brakes in August, delivering its first month-over-month sales decline since early spring. After four straight months of momentum, activity eased on a seasonally adjusted basis and prices edged fractionally lower—reminding everyone that while affordability is improving, confidence is still the missing ingredient for a full-fledged rebound.

Even so, the year-over-year picture was modestly better. TRREB reported that August sales were higher than a year ago, new listings rose, and buyers continued to benefit from abundant choice across market segments. The gap between improving fundamentals and buyer sentiment remains the defining theme of 2025.

August Shows the First Sales Decline Since Spring

On a seasonally adjusted basis, GTA home sales slipped 1.8% month-over-month to 5,633—the first decline since March. The MLS® Home Price Index (HPI) Composite ticked down 0.1% from July to $978,100, extending a pattern of flat-to-lower readings dating back to late 2024. Year over year, the HPI fell 5.2%, while sales rose 2.3% and new listings climbed 9.4%.

Measured the way most buyers experience the market—without seasonal smoothing—TRREB’s Market Watch reported 5,211 August sales (+2.3% y/y), 14,038 new listings (+9.4% y/y), and an average selling price of $1,022,143 (–5.2% y/y). The board emphasized that buyers continue to negotiate prices downward because of elevated inventory.

“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,” said TRREB Chief Information Officer Jason Mercer, underscoring the role of financing costs in converting interest into action.

Prices Remain Soft, With No Clear Floor Yet

Price signals were mixed but broadly soft. The HPI edged 0.1% lower from July, and the average price was roughly $1.02M, down about 5% from last year. Sub-segments told the real story: suburban condos saw the steepest annual declines (average prices down ~10.6%), reflecting a surge of completions and longer listing times; detached homes in the City of Toronto fell roughly 10% y/y to about $1.52M. These are the hallmarks of a market where supply is ample and buyers are price-sensitive.

The takeaway: August did not deliver a decisive “price floor.” Instead, it extended the summer’s slow-motion recalibration—less volatility, more negotiation, and a bias toward value.

Affordability Is Improving

Mortgage math continues to trend in buyers’ favor. Five-year fixed rates are generally below last year’s levels, and the Bank of Canada has held policy steady at 2.75% since March, with markets expecting further easing at the Sept. 17 decision. Lower carrying costs are helping first-time buyers qualify and giving move-up families optionality. But affordability remains a hurdle for the average household at the average price point.

As Mercer put it, many would-be buyers still struggle to “afford the monthly mortgage payment” on an average-priced home—even with lower rates and lower prices than a year ago. That sentiment gap—between what the spreadsheet says and what people feel about jobs, inflation, and trade headlines—continues to temper demand.

Buyers Benefit from Abundant Supply and Negotiating Power

Inventory remains generous. Active listings were up sharply from last year, giving buyers selection and leverage. New listings rose faster than sales on an unadjusted basis, and, with more properties lingering on the market, negotiation has become a feature, not a bug, of 2025.

The market’s micro-geography matters. Neighborhoods with historically low turnover, or with scarce family-sized product, show sporadic tightness. But across the region, the baseline remains buyer-friendly, with time to inspect, compare, and structure offers.

Economic and Trade Uncertainty Continue to Weigh on Sentiment

External forces still loom large. The mid-year Reuters housing poll flagged 2025 as a reset year, with national prices seen lower on average and sentiment dented by the U.S.-led trade dispute. TRREB has been explicit that further rate cuts could cushion tariff impacts and spark a broader recovery via housing’s economic spin-offs. The board’s messaging for August echoed that playbook.

In short: the mechanics (rates, income, inventory) are bending toward buyers; the psychology (confidence) hasn’t fully followed.

Two levers matter as we head into the post-Labour-Day market:

1. Policy rates: A Bank of Canada cut in mid-September would trim qualification rates and lift purchasing power at the margin. That’s often enough to pull fence-sitters forward—especially in family-sized semis and townhomes where supply is thinner.

   
   

2. New-listing pace: If sales stabilize while fresh supply slows, months of inventory can compress quickly at the micro level, flipping specific neighborhoods from “browse and negotiate” to “act decisively.”

Neither scenario implies a whiplash return to bidding wars. But both argue for hyper-local monitoring: the next phase is less about the GTA average and more about pockets of balance within it.

Our Read: Windows are Open

August confirmed that the GTA has shifted from last year’s broad-based cooling to buyer-led normalization. Prices are softer, selection is wider, and time is on buyers’ side. For first-timers, that’s rare alignment. For long-term investors, underwriting discipline beats timing heroics; the focus is on durable rent, quality tenants, and conservative leverage.

The hurdle to faster recovery is not math—it’s mindset. Resolve the trade overhang, deliver a bit more rate relief, and sentiment can catch up to fundamentals. Until then, progress will likely arrive in steps, not leaps.

For now, August looks less like a reversal and more like a breather. Stability is forming. Momentum is waiting on belief from buyers, from lenders, and from the economy itself.