Toronto Real Estate Market Update — December 2025
Overview
December closed out the year in a way that felt familiar. Activity slowed, prices continued to ease, and inventory remained elevated — all typical for the final month of the year. But more importantly, the month reinforced the direction the market has been heading, rather than introducing anything new.
There were 3,697 home sales across the GTA, down 9.5% year-over-year, while new listings came in at 5,299, an increase of 2.7%. The average selling price landed at $1,006,735, roughly 5.1% lower than last year.
None of these figures felt dramatic — they felt consistent. December didn’t shift the market; it confirmed it.
A Market That Demands Realism
One of the clearest themes to come out of December was how selective the market has become.
Buyers are still active, but far more measured in their approach. Homes that are priced appropriately and presented well are continuing to sell, while anything perceived as ambitious is struggling to generate traction. Negotiation has become a standard part of the process again, rather than an exception.
This isn’t a market lacking demand — it’s a market demanding alignment between price and reality.
Looking Back at 2025
Zooming out, December fits cleanly into the broader story of 2025.
Across the year, there were 62,433 home sales reported through the GTA, a decline of 11.2% compared to 2024. At the same time, new listings increased to 186,753, up 10.1% year-over-year. That increase in supply gave buyers more choice than they’ve had in years, and it played a direct role in pricing.
The average selling price for 2025 came in at $1,067,968, down 4.7% from the previous year.
Prices didn’t collapse, but they adjusted gradually as the market worked through higher borrowing costs and more cautious decision-making.
Why the Market Felt So Uneven
Rather than moving in one clear direction, the market in 2025 became increasingly fragmented.
Different property types behaved differently. Neighbourhoods told very different stories. Even similar homes on the same street could see completely different outcomes depending on condition, presentation, and pricing strategy.
Detached homes, semis, townhouses, and condos all followed their own paths across the GTA. When you zoom in further, those differences become even more pronounced at the neighbourhood level.
Confidence never fully returned, and that hesitation shaped behaviour on both sides. Buyers remained focused on interest rates and job stability, while sellers adjusted expectations gradually. The result was a market that could feel steady one week and unpredictable the next.Looking Toward Year-End
As 2025 wraps up, the market feels clearer and more grounded than it did earlier in the year. Prices have adjusted, activity has settled into a slower rhythm, and both buyers and sellers have a better understanding of the environment they’re navigating. TRREB notes that meaningful affordability improvements will depend on further declines in borrowing costs — something many buyers are waiting for.
December traditionally brings quieter conditions, and this year is expected to follow suit. The market continues to function, but at a deliberate, segmented pace that reflects the broader economic backdrop. Opportunities still exist for both buyers and sellers who approach the market with strategy and realistic expectations.
Heading Into 2026
As we move into 2026, the conditions for increased activity are in place — but not guaranteed.
There is meaningful demand sitting on the sidelines, particularly from buyers who paused over the past couple of years. If borrowing costs stabilize and employment remains steady, that demand should begin to re-enter the market gradually.
What’s more likely than a sudden shift is a slow, uneven return of activity.
Buyers have now experienced nearly three years of declining prices, and there is a growing sense that the market may be approaching a period of stabilization. The combination of increased inventory, more negotiable pricing, and slightly improved borrowing conditions is creating opportunities that haven’t been present in some time.
For sellers, the market isn’t “bad” — but it is different. Bidding wars are no longer the norm, and success depends far more on preparation, presentation, and pricing strategy.
Final Thoughts
December didn’t close the door on uncertainty, but it did bring clarity.
The Toronto real estate market has shifted into something more balanced, more negotiable, and far more nuanced than it was just a few years ago. Success moving forward won’t come from timing the market — it will come from understanding it.
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