The Greater Toronto Area’s real estate market is losing some of its pandemic-era steam, and experts say that could be good news for buyers who have been waiting for prices to cool.
Royal LePage now predicts home prices will fall 3% by the end of 2025 compared to last year, signalling that even as interest rates continue to decline, the rebound many expected has yet to appear.
“The market hasn’t taken off like everyone expected it to,” Shawn Zigelstein, broker and leader of Team Zold, Royal LePage Your Community Realty, told the Toronto Star (1). “And now we’ve got some increased inventory out there for buyers to have their choice.”
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A slower market shift
In its third-quarter housing report, Royal LePage said the aggregate price of a home in the GTA dropped 3.5% year-over-year to $1.15 million, and also fell 3.5% from the previous quarter. Aggregate prices reflect a weighted average of all housing types in the region.
Those numbers are a reversal from earlier expectations. Back in the spring, Royal LePage forecast a modest price increase by year’s end, and by summer that outlook had shifted to flat growth.
“Buyers now hold the cards and they’re taking their time,” Zigelstein said. “A lot of it is still the fact of what’s going on down south. There’s concern about jobs, investment portfolios, and an overall sense of a lack of stability.”
That uncertainty, combined with rising inventory, has tipped the balance toward buyers for the first time in years.
What buyers and sellers should know
Zigelstein said the current environment allows buyers to take a more measured approach. “Three or four years ago, Toronto region buyers would have to make an offer on a home after seeing it once. Now they can go back for multiple showings, sleep on it, and even put in a condition for a home inspection,” he said.
That change marks a sharp contrast to the frenzied pandemic market when homes were selling above asking within days.
For sellers, the advice is patience. “People need to be patient — if you’re a seller, and if you’re a buyer, you’ve got great opportunity,” Zigelstein said.
Condo slowdown drags overall prices
The company’s vice-president of research and communications, Anne-Elise Cugliari Allegritti, said the condo market is a key factor behind the overall price drop.
“The condo market is definitely dragging down prices overall,” she said. “A 500-square-foot one-bedroom isn’t necessarily the most desirable first-time product," she told the Star.
According to Royal LePage, the median price of a single-family detached home dropped 1.2% year-over-year to $1.4 million, while condos fell 7.4% to about $669,000.
Inside the City of Toronto, the aggregate home price dropped 4.6% to $1.076 million. Detached homes fell 7.4% and condos 5.6%.
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Waiting for the bottom
Cugliari Allegritti said many buyers are still waiting for prices to bottom out before making a move. “Buyers are still really holding out, a lot of them likely for the bottom to appear."
That hesitation has contributed to rising inventory as move-up buyers wait to sell their homes before purchasing another.
“Part of what’s causing prices to dip is that buyers are in the driver’s seat, affordability has been improving, and interest rates are continuing to decline,” she said. “There’s not a lot of urgency because that floor hasn’t appeared yet. We don’t think it’s far off.”
How to navigate a cooling housing market
Whether you’re buying or selling, here are key strategies to make the most of Toronto’s cooling housing market:
- Get pre-approved — and recheck your rate: Even as interest rates decline, lenders are tightening criteria. A pre-approval locks in your rate and strengthens your position when making an offer.
- Budget for more than the mortgage: Closing costs, insurance and maintenance can add up. Experts recommend setting aside at least 1 to 3% of a home’s value annually for upkeep.
- Consider timing strategically: Royal LePage expects more momentum in the spring. Buyers who can move quickly this winter may find better negotiating power before activity picks up.
- Don’t rush to the “bottom”: Waiting for the lowest price can mean missing a good opportunity. If the home and price fit your budget, experts say stability may matter more than timing the exact market low.
- Sellers should price to compete: With more listings available, homes that are priced too high risk sitting longer. Setting a realistic price can attract offers faster, even in a softer market.
How affordability and sentiment intersect
Even as borrowing costs ease, economic uncertainty — including fallout from recent trade strife with America — has made some buyers cautious. “Looming economic uncertainty due to U.S. tariffs has shaken some potential buyers,” Cugliari Allegritti said.
But with affordability gradually improving and less competition in the market, the balance may finally be shifting in favour of everyday Canadians who were priced out in recent years.
For those looking to buy, experts say this period of relative calm is an opportunity to negotiate and perform due diligence that was often impossible during the pandemic boom.
For sellers, the key is realistic pricing and flexibility. With more listings on the market and fewer bidding wars, properties are taking longer to sell.
As Zigelstein put it, “People need to be patient if you’re a seller, and if you’re a buyer, you’ve got great opportunity.”
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Toronto Star (1);
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