Toronto Real Estate Market Update — August 2025
August might be known for cottage escapes and back-to-school prep, but Toronto real estate didn’t totally check out. While things stayed relatively calm, there was plenty going on under the surface — more listings, stable(ish) prices, and just enough activity to hint that a busier fall could be right around the corner.
Here’s what happened in August, and what it might mean for the months ahead.
A Bump in Sales (Even If It Didn’t Feel Like It)
The GTA saw 5,211 sales in August, which is up 2.3% compared to the same time last year. That might not sound like fireworks, but considering how hesitant buyers have been with current interest rates, that’s a solid sign of underlying demand.
August is usually sluggish, so any growth at all is worth noting — especially when you consider what was happening on the inventory side.
Inventory is Building
14,038 new listings hit the market in August — up 9.4% year-over-year. That’s a solid jump in supply and gave buyers some much-needed breathing room. In fact, this is the most balanced the market has felt in a while: fewer bidding wars, longer average days on market (33 days), and a bit more space to negotiate.
For sellers, it’s a reminder that pricing strategy and presentation matter more than ever. The days of “list and sell in 24 hours” are on pause — at least for now. Some economists are predicting multiple Bank of Canada rate cuts before the end of 2025, which could bring momentum back to the market, but how quickly and how intensely that happens is still up in the air.
Condos: Still Affordable, Still Cooling
The average condo price dropped 5.0% to $642,195, and sales were down 4.9% compared to last August.
Inventory is piling up quickly especially in the sub-800 sq. ft. segment. A lot of these units were scooped up by investors 4–5 years ago when the market was red hot. Now, those same investors are offloading en masse, often unable to sell without taking a loss.
Many are pivoting to rent instead, which is now flooding the lease market and dragging rental prices down in some pockets of the city. At the same time, developers are hitting pause or converting condo projects into purpose-built rentals, and there are very few new condo builds being proposed for the next several years.
That said, this might just be the best time to get into the condo market, if you're prepared to play the long game. For buyers who can scoop something up now and hold for 4–5 years or more, the current downturn could turn into a big opportunity.
Interest Rates: The Real Market Driver
Right now, interest rates are the deciding factor for most buyers — and they’re steering the direction of the market more than anything else.
Some buyers are hitting pause, hoping the Bank of Canada will make a move in the coming months. They’re betting that lower rates will bring affordability back into reach and are hesitant to commit when monthly payments still feel steep. Others are taking the plunge now, knowing they can always refinance later if rates drop. These buyers are thinking long-term — focusing on securing the right home rather than chasing the absolute lowest rate.
While a lower interest rate does help with affordability, it’s only part of the story. If rates fall significantly, demand is likely to spike, and that usually means prices will rise. Right now, we’re in a rare moment where prices have stabilized (outside of condos), but they haven’t dropped dramatically. So while it might feel safer to wait, there’s a strong possibility you’ll end up paying more for the same home later if rates ease and competition heats up.
This has created a kind of “pause and plan” environment. A lot of buyers are sitting on the sidelines, watching the market, and running the numbers on how even small rate shifts could affect their budget.
The Bank of Canada isn’t offering much clarity either — using cautious, wait-and-see language that has everyone guessing. But once that first rate cut happens — even a small one — don’t be surprised if buyer confidence snaps back fast.
And when it does? Expect more showings, more offers, and potentially even the return of bidding wars, at least in some pockets of the market.
Looking Ahead: Is Fall the Rebound?
If August was the breather, September and October might be when the market stretches its legs again.
Traditionally, fall is a busier time in Toronto real estate. Kids are back in school, people are back in town, and listings pick up. But this year, it’s all going to come down to how motivated sellers are — and whether buyers waiting in the wings are ready to re-enter.
We’re heading into an interesting season. Not wild, not frozen — just balanced, for now.
Need Advice? I’m Here to Help.
If you’re curious about how things are moving in your specific area — or you just want to talk strategy — feel free to reach out anytime. Whether you're ready to jump in or just gathering info, I'm happy to help you make sense of the market.
