TRREB July 2025 Market Review

The Greater Toronto Area (GTA) housing market extended its recovery streak into July, delivering the strongest sales performance for the month since 2021. With prices largely holding steady and interest rates showing signs of easing, the market appears to be finding its footing—though confidence remains the final hurdle to a full rebound.

While new listings also increased, they did so at a slower pace than sales, nudging the market toward a more balanced state. With affordability gradually improving, July’s results offer a cautious but promising signal for buyers and sellers alike.

By the Numbers: Strongest July in Four Years

GTA REALTORS® reported 6,100 home sales through TRREB’s MLS® System in July 2025—a 10.9% increase compared to July 2024 and a 13% rise from June on a seasonally adjusted basis. This marks the fourth consecutive month of growth and the most active July since 2021.

New listings climbed 5.7% year-over-year to 17,613, while active listings surged to 30,215—up 26.2% from the 23,936 homes available in July 2024.

“The increase in home sales speaks to the early signs of improved affordability finally translating into action,” said TRREB President Elechia Barry-Sproule. “More relief is still needed, particularly on borrowing costs, but it’s clear that more households are finding their path to homeownership.”

Seasonally adjusted, both home sales and new listings increased month-over-month. However, the faster growth in sales relative to listings resulted in modest market tightening—especially in areas with high buyer interest and limited turnover.

Price Trends: Leveling Out, But Still Soft

The MLS® Home Price Index (HPI) Composite Benchmark was down 5.4% year-over-year in July, while the average selling price declined 5.5% to $1,051,719. On a month-over-month basis, both the HPI and the average price held steady, showing little change from June’s figures.

While this year-over-year price drop appears steep, the month-over-month stability suggests that the most significant corrections may be behind us. That said, some submarkets—particularly condos in suburban areas—continue to see softer pricing due to longer listing times and buyer hesitancy.

Toronto recorded an 11% increase in home sales compared to last year, while York Region and Durham Region posted the largest price declines, with certain areas seeing benchmark prices fall by more than 6%. According to TRREB’s Chief Information Officer Jason Mercer, prices in several segments appear to be nearing a floor, though overall market sentiment continues to play the most decisive role.

Affordability Improves, But Sentiment Still Mixed

Borrowing costs have fallen slightly compared to 2024, with five-year fixed mortgage rates now hovering just under 4%—a full point below where they were last summer. Combined with softer prices, this shift has helped open the door for more buyers, particularly first-time purchasers and move-up families.

Still, better affordability has yet to trigger a surge in demand. Although buyer activity has increased, many remain cautious due to economic uncertainty, persistent inflation, and Canada’s unresolved trade issues with the United States. TRREB Chief Information Officer Jason Mercer noted that the Canadian economy is largely stagnant and suggested that additional rate cuts could help stimulate both the housing market and overall economic growth.

Inventory Conditions: Buyer-Friendly, But Watch for Shifts

The 5.7% increase in new listings was outpaced by the 10.9% rise in sales, suggesting a slight tightening in inventory. However, with over 30,000 active listings on the market, buyers continue to enjoy significant leverage and choice.

This dynamic—abundant supply with improving sales—is creating a unique window of opportunity, particularly in segments that had previously seen overheated demand.

That said, some property types are beginning to show signs of renewed competition. Semi-detached homes led July’s sales growth, up 25.5% year-over-year, while detached homes followed closely with an 11.3% bump. Townhouse sales rose by 7.9%, and condo transactions ticked up 5.8%.

If sales continue to outpace new listings in the coming months, particularly in high-demand neighborhoods, we could see localized tightening and potential price stabilization as early as fall.

Segment Spotlight: Condos, Semis, and Entry-Level Homes

First-time buyers are re-emerging in the condo and townhome markets, taking advantage of price declines and better mortgage options. Condo sales, in particular, saw a 5.8% increase in July, even as average prices for smaller units continued to slide—providing opportunities for those priced out during peak years.

Investors are also returning, albeit with a different mindset. The emphasis is shifting from speculative gains to long-term value: strong rental yields, tenant quality, and holding power. For this group, stabilized pricing and a soft rental market in some areas are seen as entry points rather than red flags.

Meanwhile, semi-detached homes and transit-connected detached properties are seeing increased attention from move-up buyers looking to capitalize on the current affordability window. Suburban homes with proximity to schools, parks, and transportation are once again finding favor.

Bridging the Gap Between Market Stability and Buyer Confidence

Despite four months of sales gains and signs of price stabilization, the broader housing market is still being shaped by uncertainty.

External Factors: Confidence Is Still the Wild Card

Geopolitical tensions, particularly unresolved trade negotiations with the United States, continue to weigh on consumer confidence. Questions around tariffs, job security, and inflation have many would-be buyers taking a “wait and see” approach—even if the numbers tell a more optimistic story.

“The housing sector has the potential to be a catalyst for domestic growth,” Mercer said. “Spin-off benefits from home purchases ripple through the economy, supporting employment and small businesses.”

TRREB has called for additional rate cuts and more clarity around housing policies to help bridge the gap between affordability and confidence.

Policy Watch: More Than Monetary Moves Needed

Beyond interest rates, housing policy remains a pivotal area for unlocking future growth. While the federal foreign buyer ban continues to generate headlines, exemptions for multi-unit properties, recreational land, and development lots offer opportunities for non-resident investment that can support supply and economic expansion.

TRREB stressed the importance of combining public safety initiatives and legal reforms with economic incentives. The board highlighted that safety and affordability are closely linked, and that coordinated action is needed to ensure households feel secure both financially and socially. Its priorities for the upcoming fall policy season include boosting law enforcement resources, expediting court processes, and streamlining development approvals.

Can Momentum Carry Through the Summer?

July marked the fourth straight month of rising sales, a stable pricing environment, and elevated inventory. These fundamentals suggest the GTA market has entered a more balanced, buyer-friendly phase. But the question remains: will momentum carry into late summer and fall?

The Bank of Canada’s decision to hold its policy rate at 2.75%—combined with the possibility of further cuts—has created a cautiously optimistic environment. If macroeconomic pressures ease and sentiment improves, the stage may be set for a more robust finish to 2025.

For now, buyers are in the driver’s seat. But as always in the GTA, windows of opportunity don’t stay open forever.