GTA Housing Market Update: What 2025 Tells Us About Affordability and What’s Next

The Greater Toronto Area (GTA) housing market experienced a noticeable shift in 2025, shaped by economic uncertainty, changing consumer confidence, and improving affordability. While overall home sales declined compared to the previous year, lower prices and easing mortgage rates have created conditions that could support a market recovery moving forward.

Home Sales Down, Inventory Up

In 2025, GTA REALTORS® reported 62,433 home sales, representing an 11.2% decline from 2024. This slowdown reflects hesitancy among buyers as concerns around the broader economy and job stability continued to influence major financial decisions.

At the same time, new listings rose by 10.1% year-over-year, reaching 186,753 properties. Higher inventory levels gave buyers more options and negotiating power, helping to put downward pressure on prices across the region.

Prices Trend Lower, Improving Affordability

One of the most significant developments in 2025 was the improvement in housing affordability. The average selling price fell to $1,067,968, a 4.7% decrease compared to 2024. According to the Toronto Regional Real Estate Board (TRREB), declining selling prices combined with lower mortgage rates helped make homeownership more attainable for many households.

TRREB President Daniel Steinfeld noted that these trends have positioned the market for recovery. As confidence in the economy and labour market strengthens, pent-up demand is expected to return, driving future sales activity.

December 2025: A Snapshot

December reflected similar trends on a smaller scale. Home sales totaled 3,697, down 8.9% from December 2024, while new listings increased by 1.8%. The MLS® Home Price Index (HPI) Composite benchmark declined by 6.3% year-over-year, and the average selling price dropped 5.1% to $1,006,735.

On a seasonally adjusted basis, sales dipped slightly compared to November, while listings continued to rise. Interestingly, although benchmark prices edged lower month-over-month, the average selling price saw a modest increase—suggesting early signs of price stabilization.

What Will Drive the Next Market Recovery?

Looking ahead, TRREB Chief Information Officer Jason Mercer emphasized the importance of economic certainty. Reaffirmed trade relationships, large-scale domestic development projects, and stable employment conditions will be critical in restoring buyer confidence. Even in a more affordable market, households need assurance that they can comfortably manage long-term mortgage commitments.

A Call for Policy Support

TRREB CEO John DiMichele highlighted the role of government action in supporting housing affordability. He urged all levels of government to consider tax relief measures to help ease the rising cost of living. Providing financial breathing room for families and individuals could help restore confidence, support stable households, and encourage participation in the housing market.

Final Thoughts

While 2025 was a slower year for GTA home sales, it marked meaningful progress on affordability—an issue that has long challenged buyers in the region. With more balanced market conditions now in place, the stage is set for recovery once economic confidence returns. For buyers and sellers alike, the coming months will be shaped by how quickly stability and trust in the economy are restored.