Toronto Real Estate Market Report – May 2025 | Sales Drop, Affordability Rises

Toronto Real Estate Market Report – May 2025: Is the Market Recalibrating?

The Greater Toronto Area real estate market saw significant changes in May 2025, with new data from the Toronto Regional Real Estate Board (TRREB) pointing to a market that is slowly finding its footing. As sales decline and new listings rise, affordability is beginning to return—offering new opportunities for homebuyers in a region long plagued by sky-high prices.

Let’s break down the latest numbers in the Toronto Real Estate Market Report and what they mean for anyone buying, selling, or watching the GTA housing market.

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Sales Activity Slows, But Inventory Grows

In May 2025, home sales across the GTA dropped by 13.3% year-over-year, totalling 6,244 transactions through the TRREB MLS® System. This marks the second consecutive monthly decline in sales and highlights the continued caution from buyers navigating today’s high mortgage rate environment.

However, this slowdown in sales activity is paired with a 14% increase in new listings, with over 21,800 homes hitting the market. More inventory means more choice—and potentially more negotiating power—for buyers who have remained on the sidelines waiting for prices to ease.

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Toronto Home Prices Down – A Win for Affordability?

One of the most encouraging developments in May 2025 is the drop in home prices. The average selling price declined 4% year-over-year to $1,120,879, providing the second monthly increase compared to April, suggesting a slight recovery in price trends.

Here’s how average prices changed across property types:
    •    Detached homes: $1.43M average (-5.4%)
    •    Semi-detached homes: $1.1M average (-3.4%)
    •    Townhouses: $904K average (-4.5%)
    •    Condo apartments: $683K average (-6.4%)

While the affordability needle has moved slightly, it’s most noticeable in the condo and detached segments. Buyers seeking entry into the market—especially first-time buyers—may now find opportunities that didn’t exist even a few months ago.

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Toronto Real Estate Market Report by Region – Not All Equal

Looking deeper into the Toronto Real Estate Market Report, Toronto proper saw a slight year-over-year sales increase for townhouses (+3.4%), signaling stronger demand for mid-density housing options that offer a balance between space and price.

Meanwhile, condo apartment sales plunged by over 25% across the board, further softening this segment and giving prospective condo buyers more leverage in 2025 than they’ve had in years.

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Economic Indicators Support a Shift

Several macroeconomic trends are quietly reshaping the real estate landscape in Toronto:
    •    Toronto employment growth rose by 2.8% in April.
    •    Inflation dropped to 1.7% year-over-year.
    •    Bank of Canada’s overnight rate held steady at 2.8%, but mortgage rates remain elevated, averaging around 6%.

While high borrowing costs continue to be a concern, stabilizing inflation and stronger job numbers suggest that confidence may begin to return to the housing market—especially if interest rates begin to decline in late 2025 or early 2026.

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What’s Next for Buyers and Sellers in Toronto?

According to the Toronto Real Estate Market Report the Toronto housing market is not crashing—it’s rebalancing. Buyers now have more options and slightly improved affordability. Sellers, on the other hand, must price competitively and adjust expectations, especially in softer segments like condos and luxury detached homes.

Industry experts, including TRREB’s leadership, are also calling for policy reform. With high taxes and supply constraints still hampering long-term affordability, targeted solutions are essential to maintain momentum toward a balanced market.

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Final Thoughts: May 2025 Could Be a Turning Point

May’s Toronto Real Estate Market Report data paints a picture of a market in transition—defined by more choice, softer prices, and the first glimmers of renewed affordability. For both buyers and sellers, this isn’t a time for panic—it’s a time for strategy.