GTA Housing Market Ends 2025 with Lower Sales, Improved Affordability
The Toronto Regional Real Estate Board (TRREB) released its December 2025 market statistics this week, providing a clearer picture of a housing market that is steadily rebalancing after several years of unprecedented volatility. While some media outlets focused on the fact that 2025 recorded the lowest annual sales volume in 25 years, the broader story is one of improving affordability, stabilizing prices, and a market that is creating meaningful opportunities for well-prepared buyers and sellers heading into 2026.
There is no question that 2025 was a challenging year for the Greater Toronto Area housing market. However, it was not a market crash. Instead, the year was defined by economic uncertainty, weakened consumer confidence, and a prolonged adjustment following the unprecedented surge in prices between 2021 and early 2022.
Economic Uncertainty Shaped Buyer and Seller Behaviour
Geopolitical shifts in the United States and the resulting global economic instability placed significant pressure on Canadian employment across multiple sectors. This uncertainty sidelined many buyers and sellers throughout 2025, despite a gradual decline in mortgage rates over the course of the year.
Mortgage rates are now much closer to historical norms seen before the pandemic. At the same time, home prices declined approximately 6 per cent year-over-year and are now roughly 24 per cent below their February 2022 peak. As a result, housing affordability has improved to levels not seen since late 2019.
Opportunities Emerging in a Reset Market
While homeowners who purchased between 2021 and 2024 may find themselves constrained—selling today could mean realizing a loss—others are well positioned to take advantage of current market conditions.
Move-up buyers, downsizers, and homeowners who purchased prior to the pandemic often retain significant equity and may find that today’s relative pricing allows them to transition into a new home at a more favourable value. Because real estate prices tend to move together within local markets, price declines can create opportunity on both sides of a transaction.
First-time buyers with stable employment are also seeing improved conditions. With prices down and interest rates aligned with long-term averages, the entry point into homeownership has become more attainable than at any time in recent years.
Looking Ahead to 2026: Renewals and Rate Reality
The market is likely to see continued listing activity in 2026 as homeowners and investors face mortgage renewals at rates 2 to 3 percentage points higher than when they originally purchased. For many households, this translates into hundreds of dollars in additional monthly payments. Those unable to absorb these increases may be forced to sell, adding further inventory to the market.
Mortgage rates are not expected to decline meaningfully in 2026. The Bank of Canada signaled in December that inflation is now in line with its targets, reducing the likelihood of rate cuts. Fixed mortgage rates, which are driven largely by Government of Canada bond yields and broader economic conditions, are also expected to remain relatively stable.
Condo Market Continues to Struggle
The condominium apartment segment remains under pressure, particularly due to elevated inventory levels and product that is not well suited for families. This sector is expected to face further challenges in 2026, although selective opportunities do exist for buyers who are well positioned and focused on long-term value.
Pricing Will Matter Most in 2026
Home prices may soften modestly again in 2026 if inventory continues to outpace sales. With four to five months of supply already applying downward pressure, sellers will increasingly compete on price rather than relying on location or features alone.
While multiple-offer scenarios will still occur for well-priced, high-demand properties, the days of offers soaring $50,000 to $100,000 over asking are largely behind us. Sellers who align their expectations with current market realities will be the ones who succeed, while others may find their homes lingering on the market.
Media Headlines vs. Market Reality
Despite alarming headlines, the reality is that qualified buyers and sellers—particularly those who avoided the speculative frenzy of 2021 to 2024—are now operating in one of the most affordable markets in years.
December 2025 Market Snapshot
Toronto Regional Real Estate Board (TRREB)
- Total Sales:
3,697 transactions in December, down 26.2% from November
62,433 sales for the year, down 11.2% from 2024 - Average Selling Price:
$1,006,735 in December, down 3.2% from November and 5.1% year-over-year
Annual average of $1,067,968, down 6.3% from 2024 - New Listings:
5,299 in December, up 13.2% year-over-year and down 52.4% from November - Active Listings:
17,005 at month-end, down 30.7% from November and up 10.5% year-over-year
Durham Region
- Total Sales:
455 in December, down 26.8% from November and up 12.6% year-over-year - Average Selling Price:
$844,473 in December, up 0.5% month-over-month and down 9.2% year-over-year - New Listings:
529 in December, down 55.4% from November and up 1.0% year-over-year - Active Listings:
1,424 at month-end, down 33.3% from November and up 14.6% year-over-year
Take Advantage of Today’s Market
With prices more affordable than any time since 2019 and mortgage rates now closer to historical norms, 2026 presents real opportunities for both buyers and sellers. If you are considering buying a home, moving up, downsizing, or selling your current property, now is the time to act with a clear understanding of the market.
Reach out today to discuss your options, explore available properties, or get a personalized market assessment. Making informed decisions now can help you take advantage of the opportunities this reset market has created.