TRREB September 2025 Market Review

The Greater Toronto Area (GTA) housing market gained further traction in September, marking the fifth month in a row of strengthening activity. Sales rose both year-over-year and month-over-month as homebuyers responded to a rare alignment of lower mortgage rates and still-broad inventory.

While prices continued to edge lower on an annual basis, stability at the monthly level suggests the market may be finding its footing. The Bank of Canada’s September rate cut—the second in three months—helped unlock demand from households that had been sidelined since mid-2024. For many, it was the first tangible sign that affordability might finally be moving in their favor.

“With lower borrowing costs, more households are now able to afford monthly mortgage payments on a home that meets their needs,” said TRREB President Elechia Barry-Sproule. “Increased home purchases will also stimulate the economy through housing-related spin-off spending, helping to offset the impact of ongoing trade challenges.”

By the Numbers: Sales Rise, Listings Ease

5,592 home sales were reported in September 2025—an 8.5% increase from September 2024 and roughly 2% higher than August on a seasonally adjusted basis.

New listings climbed 4% year-over-year to 19,260, but fell compared to August as sellers gradually pulled back from the busy summer market. This shift—sales rising as listings slow—hinted at a mild tightening across several sub-segments, particularly entry-level homes and transit-connected communities.

Active listings remain elevated at roughly 30,000 properties, giving buyers leverage to negotiate, but the trajectory is slowly narrowing. The gap between supply and demand is closing—not dramatically, but decisively.

Prices: Softer Year-Over-Year, Stable Month-to-Month

The MLS® Home Price Index (HPI) Composite Benchmark fell 5.5% year-over-year to approximately $971,500, while the average selling price declined 4.7% to $1,059,377. Yet, when adjusted for seasonal factors, prices barely moved—down 0.5% on the HPI and up 0.2% on the average price.

After nearly a year of steady or declining prices, that month-over-month flatline is quietly significant. It signals that the most aggressive phase of price correction may have passed, even if sentiment has yet to catch up.

Condos continue to bear the brunt of the adjustment. In some suburban pockets—particularly in Halton and York Regions—benchmark condo prices were down between 9% and 11% from last year, reflecting a surge in completions and persistent supply overhang. Detached and semi-detached homes fared better, with smaller year-over-year declines in the 3%–6% range.

Mortgage Relief Starts to Register

The Bank of Canada’s 25-basis-point cut on September 17 pushed its policy rate to 2.5%, the lowest in three years. For buyers, that translated into meaningful savings: five-year fixed mortgage rates are now trending below 3.9% for well-qualified borrowers—down a full percentage point from mid-2024 levels.

While affordability remains a challenge for the average household, lower borrowing costs are slowly bridging the gap between income and aspiration. TRREB Chief Information Officer Jason Mercer noted that,

“Two more 25-basis-point interest rate cuts would see monthly mortgage payments move more in line with homebuyers’ average incomes, further spurring home sales and related economic activity.”

First-time buyers have been among the quickest to respond, particularly in the condo and townhouse segments. These groups are finding more negotiating power and slightly easier qualification thresholds, while move-up families are exploring detached options previously out of reach.

Inventory and Negotiation: Buyers Still Hold the Cards

Despite improved sales, the GTA remains in buyer-friendly territory. Active listings are roughly 19% higher than a year ago, giving prospective purchasers time to compare, inspect, and structure offers carefully.

This broad selection has encouraged price negotiation across most categories. Sellers are adjusting expectations to reflect a market where conditional offers and longer days on market are again the norm. However, in neighborhoods with limited turnover—think East York semis or Vaughan townhomes—competition has quietly returned.

As fall unfolds, the dynamic is evolving from “how low will prices go?” to “how long will this window last?” The balance of supply and demand is still fragile but trending toward equilibrium.

The Confidence Gap: Fundamentals Improve, Psychology Lags

If July and August underscored the theme of stability forming, September amplified it. The market’s mechanics—rates, prices, and inventory—are all bending toward balance. The only missing piece is sentiment.

Buyers remain cautious, not because of the math, but because of the mood. Ongoing trade tensions with the United States, fluctuating employment data, and memories of last year’s volatility have tempered confidence. This has kept sales below long-term norms despite objectively better conditions.

In TRREB’s view, housing remains a potential driver of domestic growth. As Mercer emphasized, “Spin-off benefits from home purchases ripple through the economy, supporting employment and small businesses.” 

Policymakers appear to agree: the Bank of Canada’s dovish tone and hints of further cuts reflect a belief that housing could help re-ignite overall economic momentum.

Segment Spotlight: Condos, Townhomes, and Family Moves

• Condos: The correction has created entry points that were unthinkable two years ago. Smaller urban units and suburban developments are now drawing interest from both first-time buyers and long-term investors seeking rental yield. While oversupply lingers, absorption rates are improving in core areas like Liberty Village and North York Centre.

  
  

• Townhomes: A quiet standout. Inventory is thinning, particularly in Durham and Peel Regions, where affordability relative to detached homes remains strong. These properties are increasingly popular with young families prioritizing space over city-center proximity.

  
  

• Detached and Semis: Demand remains selective. Properties near schools, transit lines, and employment corridors are stabilizing in price, while outlying areas with longer commutes continue to soften.

  
  

Across all categories, the narrative is shifting from speculation to fundamentals—steady rent potential, quality tenants, and sustainable financing.

Rate Cuts Are Only Part of the Equation

While lower rates have offered relief, TRREB continues to advocate for broader housing policy reforms. Supply constraints, lengthy approval processes, and municipal levies still weigh heavily on affordability.

The board has urged all levels of government to streamline development approvals, modernize zoning for infill projects, and coordinate infrastructure investment to match population growth. These measures, combined with interest rate support, could accelerate both supply and confidence—two sides of the same coin.

Market Outlook: A Window Worth Watching

September’s data suggest the GTA is edging toward balance. Sales are climbing, prices are stabilizing, and borrowing costs are easing. Yet the recovery remains uneven, reliant as much on psychology as on policy.

The market has clearly turned a corner from the stagnation of late 2024. However, with activity still below the 10-year average and price growth absent, no one is calling it a rally—at least not yet.

For buyers, the current environment represents a rare intersection of choice and affordability. For sellers, it’s a reminder that realistic pricing is the fastest path to closing. And for policymakers, it’s proof that monetary easing alone won’t sustain momentum without parallel housing reforms.

If confidence follows fundamentals, fall 2025 could mark the transition from stabilization to renewal. For now, the GTA market remains steady, balanced, and—cautiously—hopeful.