Toronto’s housing market in 2025 has been anything but predictable. After a record-setting July with some of the strongest sales numbers ever seen for that month, August brought a sharp contrast: home prices across the Greater Toronto Area (GTA) slipped to their lowest levels in four years.
This sudden shift has left buyers, sellers, and observers asking whether the market is heading for a correction or simply experiencing the usual late-summer slowdown.
The Numbers at a Glance
Condominium prices were particularly weak, down around 5% across the GTA and at their lowest levels in four years. Detached homes also softened, but not as dramatically as condos.
Toronto Proper vs. Greater Toronto Area
Inside the City of Toronto, the average sale price fell to around $992,000, down 4% from last year. While active listings rose 12%, sales actually climbed 4% year-over-year — a reminder that the numbers can be spun in different directions depending on the lens you use.
The late-summer lull also played a role. Many Torontonians spend August traveling or heading out of the city, which often leads to quieter conditions in the market.
Inventory and Seasonal Trends
One of the more interesting trends in August was the drop in active listings compared to earlier in the summer. For three straight months leading into August, there were more than 30,000 listings on the market. In August, that number fell to about 27,500.
Why? A large number of listings expired in July and didn’t return in August. Some owners may be holding off until the fall market, while others shifted their properties into the rental market, where demand has been strong heading into the school season.
Interest Rates and Affordability
Interest rates have remained relatively stable over the past six months, with a Bank of Canada announcement scheduled for September 17. Even if rates move slightly, many buyers are already relying on fixed-rate approvals, which means variable-rate announcements may have little immediate impact.
The silver lining in all of this: affordability has improved compared to a year ago. Lower prices combined with slightly better mortgage rates have brought monthly payments down for many buyers.
Property Type Breakdown
Looking Ahead
August 2025 was a reminder that real estate is seasonal, but also that Toronto’s market is under pressure. With more than five months of inventory in the GTA and condo prices softening sharply, conditions have tilted toward buyers for the first time in years.
That said, the fall market could bring a different story. Many sellers held back listings in August, waiting for September when activity usually picks up. If more quality inventory comes online, prices in certain segments — particularly detached and semi-detached homes — may stabilize or even rise.
Toronto real estate is going through a period of adjustment. Prices are down, inventory is building, and affordability has improved somewhat. But the story is complex: while some buyers are finding opportunities, others remain cautious, waiting to see how fall plays out.
Whether August marks the start of a deeper correction or just a seasonal dip will become clearer as September numbers roll in. What is certain is that the Toronto housing market continues to be one of the most closely watched in the country — and for good reason.
This sudden shift has left buyers, sellers, and observers asking whether the market is heading for a correction or simply experiencing the usual late-summer slowdown.
The Numbers at a Glance
- Average Price: Down 5.2% year-over-year, the lowest since 2021
- Active Listings: Up 22% compared to August 2024
- Sales: Up 2% year-over-year, with about 5,200 transactions
- Months of Inventory: Over 5 months — the highest level seen in 2025 so far
Condominium prices were particularly weak, down around 5% across the GTA and at their lowest levels in four years. Detached homes also softened, but not as dramatically as condos.
Toronto Proper vs. Greater Toronto Area
Inside the City of Toronto, the average sale price fell to around $992,000, down 4% from last year. While active listings rose 12%, sales actually climbed 4% year-over-year — a reminder that the numbers can be spun in different directions depending on the lens you use.
The late-summer lull also played a role. Many Torontonians spend August traveling or heading out of the city, which often leads to quieter conditions in the market.
Inventory and Seasonal Trends
One of the more interesting trends in August was the drop in active listings compared to earlier in the summer. For three straight months leading into August, there were more than 30,000 listings on the market. In August, that number fell to about 27,500.
Why? A large number of listings expired in July and didn’t return in August. Some owners may be holding off until the fall market, while others shifted their properties into the rental market, where demand has been strong heading into the school season.
Interest Rates and Affordability
Interest rates have remained relatively stable over the past six months, with a Bank of Canada announcement scheduled for September 17. Even if rates move slightly, many buyers are already relying on fixed-rate approvals, which means variable-rate announcements may have little immediate impact.
The silver lining in all of this: affordability has improved compared to a year ago. Lower prices combined with slightly better mortgage rates have brought monthly payments down for many buyers.
Property Type Breakdown
- Detached Homes: Average prices slid in August but are expected to rebound in the fall as higher-quality listings return to the market.
- Semi-Detached: Down about 6% year-over-year, but like detached homes, these are expected to see stronger activity in September.
- Townhouses: Prices fluctuated widely depending on size and location, but overall inventory suggests a balanced market.
- Condos: Perhaps the weakest segment. Official stats show a 2% decline, but on-the-ground activity suggests closer to 10% in some areas.
Looking Ahead
August 2025 was a reminder that real estate is seasonal, but also that Toronto’s market is under pressure. With more than five months of inventory in the GTA and condo prices softening sharply, conditions have tilted toward buyers for the first time in years.
That said, the fall market could bring a different story. Many sellers held back listings in August, waiting for September when activity usually picks up. If more quality inventory comes online, prices in certain segments — particularly detached and semi-detached homes — may stabilize or even rise.
Toronto real estate is going through a period of adjustment. Prices are down, inventory is building, and affordability has improved somewhat. But the story is complex: while some buyers are finding opportunities, others remain cautious, waiting to see how fall plays out.
Whether August marks the start of a deeper correction or just a seasonal dip will become clearer as September numbers roll in. What is certain is that the Toronto housing market continues to be one of the most closely watched in the country — and for good reason.
