TRREB May 2025 Market Review

The Greater Toronto Area (GTA) housing market edged further into recovery territory in May 2025, continuing the cautious climb that began earlier this spring. Inventory remained strong, prices showed signs of stabilizing, and affordability continued to improve—yet many buyers still appear to be waiting for a clearer green light.

While activity picked up on a month-over-month basis, the broader picture remains one of moderation. Buyers are more engaged than they were this past winter, but uncertainty—both economic and geopolitical—continues to shape market sentiment.

By the Numbers: Signs of Life, But Not a Surge

GTA REALTORS® reported 6,244 residential transactions in May 2025. That’s down 13.3% compared to May 2024, but up 8.4% from April on a seasonally adjusted basis—marking two straight months of growth after a sluggish start to the year.

New listings climbed to 21,819, a 14% increase year-over-year, further adding to buyer choice across the region. This sustained supply boost is helping maintain balance in the market, especially after the inventory constraints of previous years.

“The increase in listings is giving buyers more leverage and more time to make decisions,” said TRREB President Elechia Barry-Sproule. “But every neighbourhood is different. Understanding hyperlocal trends is critical right now.”

Price Trends: Finding the Floor 

May’s pricing data continued to reflect a more affordable market. The MLS® Home Price Index (HPI) Composite Benchmark fell 4.5% year-over-year, while the average selling price dropped 4.0% to $1,120,879. But on a seasonally adjusted month-over-month basis, prices ticked upward—hinting that we may be nearing a pricing floor.

Affordability has noticeably improved across the GTA, with borrowing costs easing and prices adjusting downward. These conditions should ideally support stronger sales activity, but a lack of buyer confidence continues to hold the market back.

Indeed, affordability alone isn’t enough to get the market fully moving again. Buyers remain cautious, and many are weighing broader risks before making a move.

Confidence Lags Despite Improved Conditions 

Even with better prices, more listings, and stable interest rates, many prospective buyers are still on the sidelines. Why? Because today’s market is as much about confidence as it is about cost.

From job security concerns to shifting global trade policies, households are doing more than running the numbers—they’re evaluating future stability. For many, the uncertain trade relationship between Canada and the U.S. is a key sticking point. Until clarity emerges, full market momentum will likely remain elusive.

Current market fundamentals point to a period of stability, with prices unlikely to drop much further. A rebound appears to be on the horizon, making this a window of opportunity rather than a time to wait.

Inventory Rebound: Buyer Advantage for Now 

The 14% year-over-year jump in listings continues to shift the market dynamic in buyers’ favour. Increased inventory has created more options, longer decision windows, and softer pricing across multiple segments.

However, TRREB noted that sales in May rose slightly faster than listings, suggesting that if demand continues building, inventory could begin tightening again—especially in high-demand segments like townhomes and entry-level properties.

What’s Moving: Entry Points and Rental Plays

While overall activity is still below 2024 levels, several submarkets are showing stronger engagement:

• First-Time Buyers: With lower prices and more inventory, first-timers are re-entering the market—especially in the condo and townhome spaces where affordability has returned.

  
  

• Investors: Stable rents and softened pricing are creating buying opportunities, particularly in the condo market. Many investors are taking a long-term view, prioritizing cash flow and tenant quality over quick flips.

  
  

• Detached Homes: While still soft, interest is slowly returning in suburban detached segments—especially where transit access and community amenities offer strong value for move-up buyers.

Policy Watch: Words vs. Action 

Recent federal commitments to streamline construction and reduce housing costs remain front and center, but tangible results are still pending. TRREB leadership emphasized the need to translate policy into action to support a healthier long-term market.

With inflation under control, a rate cut would be a timely boost—particularly for first-time buyers and those up for renewal. However, improving affordability will take more than monetary policy; meaningful action on housing supply remains essential.

Construction also plays a critical economic role, helping cushion the impact of trade-related uncertainty while supporting employment and long-term stability.

Looking Ahead: Can Summer Spark a Turnaround?

Two months of back-to-back gains, stabilizing prices, and strong inventory suggest the GTA market is gradually laying the groundwork for a recovery. But whether that recovery takes off this summer will depend on macroeconomic confidence more than anything else.

The Bank of Canada’s recent rate hold at 2.75%, coupled with its dovish tone, opens the door to potential cuts later in 2025. If those cuts materialize, they could act as the catalyst needed to convert hesitation into action—particularly among sidelined buyers who have been waiting for the right moment.