The Toronto real estate market is starting 2025 with some interesting shifts. Mortgage rates are finally easing, and while we’d expect that to bring buyers rushing in, many are still taking a wait-and-see approach. With new trade tensions in the mix, less listings holding back on offers and more inventory, it’s clear that buyers are being more selective and strategic.

Let’s break it all down.

The Sales & Listings Rundown

It’s a Buyer’s Market—Sort Of. More homes are hitting the market, but not as many are selling. February saw 4,037 homes change hands across the GTA, a steep 27.4% drop from last year. Meanwhile, new listings jumped 5.4% year-over-year, pushing total active inventory up 76%. For buyers, this means more options and more negotiating power.

Price Check: The average home price dipped slightly to $1,084,547, down 2.2% from February 2024. But while some sellers are standing firm on price, others are adjusting their expectations as competition heats up. If you’re selling, getting the price right from the start is key..

What’s Driving the Market?

Trade Uncertainty: With the U.S. slapping hefty tariffs on Canadian goods, economic confidence has taken a hit. Some buyers are waiting to see how things play out before making a move.

Interest Rates: The cost of borrowing is easing, but rates remain above pandemic lows. Buyers are still being cautious, with affordability a top concern.

Listings Surge: More sellers are coming to market, but not all properties are getting the attention they hoped for. Depending on the area, the days of buyers rushing to snatch up homes seem to be behind us—at least for now.

The takeaway? The market is in flux. Buyers have more power than they did a year ago, but sellers who price smartly can still attract strong offers.

Neighbourhood Spotlight

East Toronto: A bright spot in the market! Well-priced detached homes are still attracting multiple offers. Buyers are looking for value, and move-in-ready properties in prime locations are getting the most attention.

Downtown Condos: The condo market continues to struggle, especially smaller investor-owned units. Prices have dipped 2% year-over-year, and with rising inventory, buyers have plenty to choose from. If you’re in the market for a condo, now’s a great time to shop around.

Looking Ahead: What’s Next for 2025?

More Buyer Power: With inventory levels picking up, buyers can afford to take their time. Expect more negotiation and conditional offers. If you’re looking to buy, patience is paying off.

Spring Market Uncertainty: Traditionally, March kicks off the spring real estate rush, but this year feels different. Even with rates coming down, economic jitters could keep some buyers on the sidelines. If you’re selling, preparation and pricing strategy are more important than ever.

Rental Market Shifts: A wave of new condos are hitting the rental market, slowing rent increases. Investors looking to sell may need to adjust their price expectations.

Thinking of selling? Make sure your home stands out with staging, great marketing, and the right pricing strategy for this market.

The Bottom Line

Smart pricing and strong presentation are key for sellers, while buyers have more leverage but must act fast on the best properties. Whether you’re buying, selling, or investing, a strategic approach is essential.

Let’s chat! Email [email protected] for a personalized strategy that works for you.