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It’s almost summer and the Toronto real estate market is…well….quiet. We’ve got all the ingredients for a classic buyer’s market – more inventory, longer days on market, price adjustments – yet buyers are still sitting on their hands. What’s going on?
Toronto Real Estate: May 2025
Let’s dig into the most telling pieces of data that explain this buyer’s market paradox.
1. There’s a LOT of Inventory
What happened: In May 2025, the number of homes listed for sale increased by 42% vs last year, to 30,964. For context: In May 2023, we had only 11,869 active listings.
Why this matters: This isn’t a sudden shift – we’ve been steadily climbing to inventory levels Toronto hasn’t seen for decades.
The historical context: Toronto buyers are used to scrapping over scraps. Now we’re in territory where you can actually compare properties, sleep on decisions, and negotiate terms. It’s normal market behavior that feels revolutionary here.
Why this matters: If you’re selling, pricing strategies from the seller’s market era won’t work. We’re back to a world where properties need to compete on merit.
2. Conditions for Buyers Are Perfect
What happened: Home sales in the GTA dropped 13.3% year-over-year to 6,244 transactions in May 2025, despite buyers having every advantage they’ve asked for over the past decade. Sales were down a whopping 30% when compared to May 2023.
It’s a buyer’s paradise out there:
- Interest rates are down from 5.0% to 2.8% since May 2024 (the overnight rate)
- There’s 41% more inventory to choose from
- Prices are down across the GTA
- You have 37% more time to decide (it’s taking 26 days on average to sell vs. 19 days last year)
- Properties selling at or below asking (99% sale-to-list ratio)
Why this matters: This is an excellent time to buy – if you’re planning to hold it for 5+ years. The combination of better prices, lower rates, and actual choice is rare in Toronto. But you need to be comfortable with potential continued volatility.
The psychology problem: Many potential buyers are either waiting for “even better” conditions (that may never come) or worried about economic uncertainty. After years of being priced out and outbid, they don’t trust good conditions when they finally arrive.
3. Toronto: Still Price Resilient
What happened: The City of Toronto average price hit $1,155,616 in May 2025, down 3.2% from May 2024’s $1,193,202.
The reality check: While prices are down year-over-year, non-condo market prices have been relatively stable month-to-month.
416 breakdown (all property types):
- Toronto West: $1,098,153 (down 1.8% year-over-year)
- Toronto Central: $1,242,154 (down 4.1% year-over-year)
- Toronto East: $1,060,589 (down 4.4% year-over-year)
Why this matters: Toronto prices have shown surprising stickiness. Sellers aren’t panicking, and buyers aren’t getting the deep discounts they hoped for. The adjustment has been orderly, not dramatic.
4. The Condo Correction Continues
What happened: Condo apartments averaged $683,413 in the 416 in May 2025, down 7.3% from last year. More telling: active condo listings in Toronto Central alone jumped 51% year-over-year. And condo sales? May saw an almost 25% decline vs 2024 (and 42% lower than in May 2023).
The investor exodus: That 51% surge in Toronto Central condo listings isn’t just market adjustment – it suggests selling by spooked investors who can no longer make the math work on cash-flow negative properties.
What the numbers really mean: With 7.0 months of inventory for condos in Toronto (compared to 5.1 months for the overall Toronto market), condos have shifted solidly into buyer’s market territory.
Why this matters: If you own a condo, fear not: your property is still extremely valuable. But the days of automatic appreciation are on pause. If you’re thinking of selling, price aggressively from day one. If you’re shopping for a condo, you’ve got strong negotiating power.
5. Detached Homes: Still the Champion
What happened: Detached homes in Toronto averaged $1,719,937 in May 2025, down only 1.7% from last year – the smallest decline of any property type.
The surprise twist: With just 2.4 months of inventory for detached homes, detached properties are still operating in seller’s market conditions and we regularly see multiple offers for great houses in great locations.
Why this matters: The market isn’t monolithic. If you own a detached home in Toronto, you’re playing a different game than the condo owner down the street. Scarcity still rules for ground-related housing.
6. It’s Taking Longer to Sell
What happened: Properties in Toronto are taking an average of 26 days to sell in May 2025, up from 19 days in May 2024. But here’s the number that really matters: the total average days on market (including re-listings) hit 39 days, up from 29 days last year.
The real story behind the numbers: The 26-day figure only counts the final listing that actually sold. The 39-day total tells you how long properties have actually been sitting on the market, including price drops and re-listings. That 10-day gap reveals a lot of behind-the-scenes adjustments.
Why this matters: That gap between listing days (26) and total days (39) means sellers are having to reset expectations mid-stream. Properties aren’t just taking longer to sell – they’re requiring strategy changes along the way. For buyers, it means the market is working in your favour even more than the headline numbers suggest.
The context: While 39 days sounds dramatic, it’s really not. We’ve just gotten used to the lightning-fast sales of recent years where properties sold in a week.
7. The 905 vs 416 Affordability Gap
What happened: The 905 regions averaged $1,022,631 in May 2025, while the 416 hit $1,155,616 – a gap of $133,000.
The trend: This gap has actually narrowed slightly from last year when it was $157,000. The 905 held up better price-wise than many expected.
Why this matters: The “drive until you qualify” strategy is less compelling when the savings are smaller and commute costs are higher. Toronto proper is looking more attractive on a relative basis
8. The Missing First-Time Buyers
What happened: Despite textbook buyer’s market conditions, first-time buyer activity remains stubbornly low. Properties under $800,000 represented only 31% of sales in May 2025.
The disconnect: Lower prices plus more inventory should equal more first-time buyers. Instead, they’re largely absent from the market.
Why they’re still missing:
- Even “corrected” prices haven’t dropped enough to meaningfully improve affordability
- Stress test rates still eliminate many potential buyers
- Job market uncertainty has made people more cautious about major purchases
Why this matters most: Market mechanics are working (more choice, negotiating power) but the fundamental affordability crisis persists. The buyer’s market benefits existing homeowners moving up more than new entrants trying to get in.
The BREL Bottom Line
May 2025 delivered everything buyers claimed they wanted – more choice, more time to decide, better prices….but that doesn’t automatically translate to buyer confidence. Between affordability concerns, economic uncertainty, and the psychological hangover from years of being priced out, many potential buyers are frozen by choice rather than empowered by it. They’ve been told to “wait for a better market” for so long that they don’t recognize when it arrives.
Buyers: The market you’ve been waiting for is here. Perfect conditions are rare in Toronto real estate, and waiting for “even better” might mean missing your window entirely.
Sellers: Price competitively from day one. In a buyer’s market, hope isn’t a pricing strategy. You’re selling in a market where buyers have options and time – respect both.
For everyone: This isn’t a broken market or a boom market – it’s a normal market. And in Toronto real estate, normal can feel surprisingly foreign.