I’m not going to pretend to be surprised by the major shifts we’ve seen in real estate in the Greater Toronto Area in June 2025:

• Prices are down 5.4 per cent
• Sales are down 2.4 per cent
• New listings (supply) is up slightly 7.7 per cent
• Active listings (inventory) is up a whopping 30.8 per cent
• Properties are taking longer to sell, with a 30 to 40 per cent increase in days on market 

In fact, active listings finally jumped up to the point that we’re at the highest number we’ve ever seen:

 

 

So… why am I not surprised? 

If you’ve been reading my ramblings for a while, you’ve probably picked up that for a long time, I felt that Canada’s next (read: current) real estate downturn would look a lot like our last downturn, which took place in the 1990s. 

Before you interpret this as a self-aggrandizing introduction to this article, I want you to understand that I’ve been saying this since 2017’s market peak. So, as of this year, I’ve been wrong more years than I’ve been right:

Wrong – 2019, 2020, 2021, 2022
Right – 2023, 2024, 2025 

In my defense I will say that 2018 likely would’ve ended up being a similar outcome if the pandemic and the policy response of 0.25 per cent overnight rates had not happened – but I don’t think I’ll need to defend myself for this one, I just need to wait a year or two, it seems.

Big shoutout to Xelan – one of my favourite substack writers (https://xelan.substack.com/) for vindicating me a bit with this chart below.

 

 

GTA housing market’s uneasy calm 

 

The Greater Toronto Area housing market has long moved on from the frenetic volatility of its pandemic-era highs and market-correction lows. The rapid transactions and nauseating price discovery swings up and down are now relics of a different time. In their place, a steadier market, where buyers take their time, sellers adapt to new conditions and policymakers watch cautiously from the sidelines.

June’s TRREB Market Watch report points to a market in gradual adjustment, and importantly, not stagnation. Prices are down, inventory has grown and mortgage rates, though still elevated, had begun to give some optimism to buyers. And therein lies the rub. 

 

The problem with mortgage rates

 

A bit of a standoff has evolved between consumers and their lenders – or at least their lenders’ economists. On one hand, buyers are signaling clearly that they expect mortgage rates to fall further. So much so that buyers shifted their demand to shorter-term fixed-rate and variable-rate mortgages:

 

 

 

On the other hand, bank economists are signalling that the Bank of Canada’s rate-cutting phase might be coming to an end. Recent articles in the Financial Post stated that:

1. “Canadians looking for more interest rate relief might be out of luck / RBC says the Bank of Canada is done with rate cuts for this cycle” 
2. “More economists think the Bank of Canada is done cutting interest rates / ‘Shouldn’t even be thinking about thinking about when to cut rates,’ says Scotiabank’s Derek Holt”

And so it stands to reason that rather than igniting a rush of demand, changes to the interest rate environment have ushered in a period of measured activity as buyers weigh their options carefully.

The result is an uneasy calm in a market searching for direction.

 

More choice, less conviction

 

At first glance, the data appears to favour buyers. Active listings surged 30.8 per cent year over year, surpassing 31,600 homes on the market. New listings rose 7.7 per cent. Prices have softened too, with the average GTA home now selling for $1.1 million, a 5.4 per cent decline from last June. 

But sales suggest a more restrained response. June recorded 6,243 transactions, a slight decline of 2.4 per cent compared to a year ago. Homes lingered on the market for an average of 26 days while relisted properties often took 42 days to find a buyer. 

Buyers are clearly still taking their time. Many remain wary of overextending themselves in an economy marked by uneven job growth and geopolitical uncertainty. Even with borrowing costs slightly lower than last year, the aftershocks of previous hikes continue to weigh on household decisions, leaving many reluctant to rush into major commitments.

 

 

 

The urban-suburban divide

 

Within the GTA, the divide between Toronto’s 416 and the surrounding 905 regions is widening.

In Toronto proper, there are faint signs of renewed confidence. Detached homes saw their average price slip 6.5 per cent to $1.64 million and this modest relief appears to have drawn more affluent buyers back into the market. Semi-detached homes outperformed, posting an 18.6 per cent increase in sales year over year, suggesting that family buyers are reconsidering urban living after years of suburban migration.

In Toronto, a very supply-constrained market, it seems that decreases in price are producing the outcome we should expect them to: if house prices fall, more people can afford the houses, so more people buy the houses. 

In contrast, the 905 appears to tell a different story – and this is where you’ll want to pay attention to what the market is communicating about its confidence in that market. Lower prices have not resulted in more sales. Detached prices fell in lockstep with Toronto’s to an average of $1.3 million, but sales dipped 5.7 per cent. Semi-detached sales also declined, and so did townhouse sales. 

 

 

Confidence is the missing ingredient

 

Jason Mercer, TRREB’s chief information officer, noted that additional interest rate cuts and more stable global trade conditions could help rebuild consumer confidence. Current mortgage rates, though lower than their 2024 highs, remain elevated enough to strain affordability. A BMO survey earlier this year found that nearly 67 per cent of potential homebuyers planned to delay purchases until rates fell further. 

So… given that their peers like RBC and Scotiabank aren’t anticipating further rate cuts, is the market at risk of finding a stalemate? Even with OSFI reviewing the B-20 stress test, financial levers alone may not resolve the slowdown. Recent economic volatility has shifted expectations too and this has left buyers questioning whether the market has truly stabilized.

According to CMHC’s 2025 Mortgage Consumer Survey, more than half of first-time buyers cite concerns about overpaying in a market that still feels unpredictable. Instead of the fear of missing out that defined the pandemic housing frenzy, caution now dominates buyer psychology.

 

The unspoken factor: Safety and social stability

 

John DiMichele’s remarks about rising home invasions and carjackings may seem like an outlier in a housing report, but they reflect an often-overlooked reality: the housing market does not exist in a vacuum. Public safety perceptions matter. A home is a sanctuary and not just an asset. When that sense of security is undermined, even marginally, it can weigh on demand.

The federal government’s proposed crime bill may strengthen public trust in time, but in the interim, unease lingers.

 

Generational shifts and the changing buyer profile

 

It is impossible to ignore the generational dynamics shaping today’s market. Millennials remain the dominant first-time buyer cohort in the GTA, while older Gen Zers, many of whom held off purchasing during the pandemic, are only now beginning to test the waters of homeownership. Yet their approach differs from earlier generations. Saddled with a cost-of-living crisis, they are deliberate, cautious, and less swayed by market hype.

This emerging cohort prizes flexibility and affordability. They are more willing to consider alternative ownership models if it means avoiding the overleveraged mistakes they witnessed during the last boom.

 

A market in search of momentum

 

I’ve alluded to this in my previous op-eds on the GTA market: for buyers, the current environment offers negotiating power unseen in years. Prices are relatively soft, inventory is plentiful, and conditional offers are back on the table. 

Yet the broader trajectory of the GTA housing market hinges on more than this. Until confidence returns, rooted in economic and geopolitical certainty, the market will continue its measured, cautious pace.

 

The verdict: still a pause 

 

June’s TRREB report captures a housing market at a crossroads. Prices have eased, inventory has surged, but conviction remains elusive. Toronto and its suburbs are no longer dancing to the same frantic tune of the previous years. Instead, they move hesitantly, waiting for a cue that may come from lower rates, improved economic signals, or simply time.

For now the market is still caught in a rare moment of quiet, a pause that will either reset the rhythm or set the stage for the next great swing.