Toronto Area Real Estate Market Report ~ September 2025

Low-rise home prices in the Toronto area are now down 27% from the February 2022 peak — one of the sharpest corrections we’ve seen in decades.

August data shows that low-rise sales were up 8% year-over-year, as some buyers moved off the sidelines to take advantage of lower prices. But the average price of $1.225M is still 7% below last year and far below the $1.68M peak reached in February 2022. With active listings up 35%, inventory growth continues to outpace sales keeping downward pressure on prices.

The condo market looks no stronger.

Sales slipped 2%, while listings rose 18%, leading to a 4% drop in average prices.

Some homeowners are pinning their hopes on the Bank of Canada cutting rates this fall. But the reality is that a weak economy, ongoing uncertainty, and only modest rate relief aren’t enough to spark a surge in demand. Even a new U.S. trade deal, while helpful for confidence, is more likely to bring buyers back gradually, not fuel a hockey-stick rebound.

Toronto’s housing market is adjusting to a new reality: slower demand, more supply, and prices that may need to fall further before stability returns.

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By the Numbers: August 2025

The average price for a house in the Toronto area was $1,224,729 in August, down 7% from the same month last year. Last month's median house price was $1,060,000, down 6% from the same month last year.

House sales in August were up 8% over last year, while new house listings were up 15%. The number of houses available for sale at the end of the month, or active listings, was up 35% over last year. 

The current balance between supply and demand is reflected in the MOI, which measures inventory relative to the number of sales each month. In August, the MOI for houses was 4.9.

The average price for a condo in the Toronto Area was $664,841 in August, down 4% from the previous year. The median price for a condo in August was $598,000, down 6% from the previous year.

Condo sales in August were down 2% over last year, and new condo listings were up 6%. The number of active condo listings was up 18% from last year. The MOI increased slightly to 6.8. 

Browse detailed monthly statistics for August 2025 for the entire Toronto area market, including house, condo and regional breakdowns below. 

The problem with this framing is that it suggests Canada simply built “too many condos.” In reality, the problems run deeper - and they’re problems of what we built and why we built it.

First, we built too many of the same type of condo: micro-units. Back in 2021 I warned that when investors drive new housing supply, it creates the risk of overbuilding exactly the type of property they’re buying. “Might we find ourselves with more 500–600 sq. ft. condominiums than we need five years from now?” Unfortunately, that is exactly where we’ve landed.

Second, prices were driven not by end-user demand but by investor speculation. Investor expectations are fundamentally different from households looking for a place to live. As MIT economist Alp Simsek has shown, investors tend to be overly optimistic during booms - pushing prices far higher than they otherwise would beand overly pessimistic during busts, making downturns even sharper. That’s what has played out in Canada’s condo market.

But perhaps the bigger failure is the silence of Canada’s housing experts. Where were the warnings about a condo bubble? Where were the cautions about an oversupply of micro-units?

For years, the dominant narrative among housing economists and policy voices has been that Canada’s housing problems are almost exclusively the result of too little supply caused by government frictions. When condo prices were climbing rapidly, this framing offered a rational explanation for irrational price growth. It reassured investors that prices were justified, normalizing the run-up and making them overly confident about paying ever-higher prices. In doing so, it didn’t just fail to warn about the risks—it helped fuel the bubble.

This mindset has also shaped the research of our national housing agency, CMHC, whose work has been consistently biased toward supply-side explanations. CMHC had no trouble warning of steep price declines when COVID hit (a prediction that proved wrong). Yet when it came to the far more obvious risks in the condo market—irrational pre-construction prices 50% above comparable resale units, and the flood of tiny investor-oriented condos—they chose silence.

The result? Exactly the outcome many of us feared: an oversupply of micro-condos, a frozen new condo market, and households left worse off.

No one expects housing experts to perfectly predict the future. But it’s not unreasonable to expect our national housing agency to warn governments and consumers when our housing system is careening toward risks as glaring as a condo bubble. By failing to do so, they didn’t just miss the story—they helped write it.

Toronto’s condo market is under more stress than headline numbers suggest. While average prices dipped just 4% year-over-year in August 2025, that figure masks a troubling dynamic: a growing number of distressed sellers are unloading units at steep discounts compared to what identical units in the same buildings sold for within the past year.

When a condo sells far below recent comparables, it doesn’t just hurt that seller. It has the potential to reset prices in the entire building. Buyers and their agents often anchor to the lowest recent sale when negotiating, meaning one forced sale can drag down values for dozens of units.

So why hasn’t this led to a dramatic, broad-based crash? Two reasons. First, these fire sales are still relatively rare and concentrated. Many buildings don’t yet have distressed sellers, so their prices remain insulated. Second, even when they occur, agents often filter them out. Realtors usually search for “directly comparable” sales—same size, same layout. If a distressed seller unloads a 600 sq. ft. one-bedroom for 20% below the going rate, an agent representing a buyer looking at a 750 sq. ft. 1+den in the same building might ignore that sale as irrelevant, even though in today’s fragile market it is anything but.

This makes spotting distress tricky. It requires combing through reams of data, then making judgment calls about comparability. Historically this was painstaking work, but today AI tools make it possible to surface these hidden weak spots in a matter of hours instead of days.

A few examples illustrate the scale of the declines:

• Yonge & Bloor: A two-bedroom, ~850 sq. ft. condo sold for $1,000,000 ($1,176 psf) in October 2024. Just seven months later, a nearly identical unit on a higher floor sold for $818,000 ($962 psf), an 18% drop.
  
  
• Yonge & Eglinton: One-bedroom plus den units around 600 sq. ft. fetched about $600,000 ($1,000 psf) last fall. This year, a similar unit sold for $485,000 ($789 psf), a 19% decline.
  
  

These are not isolated anecdotes. They’re part of an emerging pattern of stress that average price statistics gloss over.

If this trend continues, two major consequences loom. First, more distressed sales will begin to reprice entire buildings, leading to sharper declines in average values. Second, the widening gap between falling resale prices and still-elevated new condo prices could chill pre-construction sales and delay new projects for years, even if policymakers decide to slash taxes on new condo construction. 

In short, Toronto’s condo market looks far weaker beneath the surface than headline numbers suggest. The real story lies in these distressed transactions—and in whether they remain outliers or spread more broadly across the city.

That’s the question CMHC’s latest piece takes on. The author’s position is blunt: yes, most rent control regimes discourage private investment and slow the pace of building. His prescription is to strengthen tenant protections but keep rents largely at the mercy of the market - on the assumption that investor incentives will translate into more supply and lower rents.

But a few paragraphs later, the story changes. Suddenly, we’re warned of a “short-term risk of oversupply” and told that falling rents could “curtail incentives to build.” After years of insisting Canada has a housing shortage, affordability itself is cast as the problem - because it threatens returns. If the market is the solution, why is it treated as a crisis when it produces lower rents?

The examples are just as telling. Tokyo’s rental supply is credited to limited rent control, with no mention that Japan’s population has been shrinking for more than a decade, meaning supply naturally exceeds demand. And here in Ontario, new housing has been exempt from rent control since the 1990s, yet rental construction was stagnant for decades. If rent control was the main barrier, we’d have seen a rental boom long ago.

It’s also worth remembering: this is the same author who opposed restricting short-term rentals because it “risks undermining confidence in the desire to invest in new supply.” In other words, even measures to keep homes available for long-term renters - or for buyers - are framed as threats if they make investors uneasy.

This is more than a disagreement over rent control. It’s a glimpse into the mindset of our national housing agency: a deeply neoliberal worldview that treats investor confidence and returns as the ultimate policy goal.

Affordable housing - whether rented or owned - is secondary, something to be tolerated only if it doesn’t disrupt market incentives.

As long as this remains CMHC’s guiding philosophy, we will keep building a housing system designed to serve capital first and Canadians second.

You can read the full CMHC piece here: https://lnkd.in/gS2_cF7K

Monthly Statistics

House Statistics

House sales (low-rise freehold detached, semi-detached, townhouse, etc.) in the Greater Toronto Area (GTA) in August 2025 were up 8% compared to the same month last year.

New house listings in August were up 15% compared to last year.

The number of houses available for sale (“active listings”) was up 35% in August compared to the same month last year.

The Months of Inventory ratio (MOI) looks at the number of homes available for sale in a given month divided by the number of homes sold in that month. It answers the following question: If no more homes came on the market for sale, how long would it take for all the existing homes on the market to sell, given the current level of demand? The higher the MOI, the cooler the market is. A balanced market (a market where prices are neither rising nor falling) is one where MOI is between four to six months. The lower the MOI, the more rapidly we would expect prices to rise.  

While the current level of MOI gives us clues into how competitive the market is on-the-ground today, the direction it is moving in also gives us some clues into where the market August is  heading. 

The MOI for houses increased to 4.9 in August.

The share of houses selling for more than the owner’s list price decreased to 21% in August.

The average price for a house in August 2025, $1,224,729, was down 7% from the same month last year.

The median house price in August was $1,060,000, down 6% over last year.

The median is calculated by ordering all the sale prices in a given month and then selecting the price at the midpoint of that list such that half of all home sales are above that price and half are below that price. Economists often prefer the median price over the average because it is less sensitive to big increases in the sale of high-end or low-end homes in a given month, which can skew the average price.  

Condo Statistics

Condo (condominiums, including condo apartments, condo townhouses, etc.) sales in the Toronto area in August 2025 were down 2% compared to the same month last year.

New condo listings were up 6% in August over last year.

The number of condos available for sale at the end of the month, or active listings, was up 18% over last year.

Condo months of inventory increased to 6.8 MOI in August. 

The share of condos selling for over the asking price was unchanged at 16% in August.

The average price of a condo in August was $664,841, down 4% from last year. The median price was $598,000, down 6% from last year.

Browse Real-Time Market Trends on Movesmartly.com:

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