TRREB March 2025 Market Review

The Greater Toronto Area (GTA) housing market is entering a new phase of affordability—but not necessarily acceleration. While declining borrowing costs and softening home prices have created a more accessible market for many would-be buyers, persistent economic uncertainty and upcoming political shifts are prompting a continued “wait-and-see” mindset.

In March 2025, GTA REALTORS reported 5,011 home sales through TRREB’s MLS System—a 23.1% decline compared to March 2024. Month-over-month, sales dipped a further 2.4% on a seasonally adjusted basis, highlighting subdued activity even in what’s typically a ramp-up month for the spring market.

Conversely, new listings surged, hitting 17,263, which represents a 28.6% year-over-year increase, boosting overall inventory levels by 9.5%. This growing supply has helped moderate prices and created greater choice for buyers—but the enthusiasm remains tempered.

A Market Moving Toward Affordability

The good news for buyers: homeownership in the GTA is becoming more affordable than it was one year ago. The average selling price in March 2025 came in at $1,093,254, a 2.0% decline from March 2024. The MLS Home Price Index (HPI) Composite Benchmark, which offers a more stable indicator of pricing trends, dropped by 3.8% year-over-year.

“Homeownership has become more affordable over the past 12 months, and we expect further rate cuts this spring,” said TRREB President Elechia Barry-Sproule. “Buyers will also benefit from increased choice, giving them greater negotiating power. Once consumers feel confident in the economy and their job security, home buying activity should improve.”

This shift toward affordability is being driven by both declining interest rates and increased housing supply. For many households, lower mortgage payments could provide the breathing room needed to re-enter the market—but only if broader economic concerns begin to ease.

The Weight of Economic and Political Uncertainty

Despite more favourable buying conditions, many prospective buyers are staying on the sidelines. According to TRREB Chief Information Officer Jason Mercer, the current climate of economic uncertainty—exacerbated by trade tensions and a looming federal election—is holding back demand.

Given the current trade uncertainty and the upcoming federal election, many households are likely taking a wait-and-see approach to home buying. If trade issues are resolved or public policy choices help mitigate the impact of tariffs, home sales could see a rebound. For many potential buyers, confidence in their employment situation remains a crucial factor before committing to long-term mortgage payments.

In addition to economic variables, the political landscape is playing a significant role. As the federal election draws closer, housing has become a central issue across party platforms, reflecting mounting public pressure for meaningful action on affordability and supply. Recent polling suggests that access to affordable housing remains a top priority for Canadians. Federal parties have acknowledged this, recognizing that building more housing will be a key driver of economic growth moving forward.

Market Segments: Where the Opportunities Lie

As in previous months, different segments of the market are performing in distinct ways:

• Detached homes continue to appeal to buyers seeking long-term value and space, especially in suburban areas. However, despite holding firm on price, this segment has seen a sharp slowdown in sales activity, signaling a more selective pool of buyers and growing price flexibility as inventory builds.

  
  

• Semi-detached homes remain relatively stable. Price movements have been modest, and while sales have slowed, this segment still attracts buyers looking for a more affordable alternative to detached housing without compromising on space or privacy.

  
  

• Townhouses are seeing increased availability and more competitive pricing. As a middle-ground option between condos and detached homes, they continue to draw interest from younger families and move-up buyers, particularly those prioritizing value and layout.

  
  

• Condominiums face ongoing pressure from hesitant buyers. Sales and prices have both declined, reflecting broader economic caution. However, this environment presents an opening for first-time buyers and investors, with improved affordability and strong rental market fundamentals creating longer-term upside potential.

  
  

Investment Considerations

From an investor standpoint, March’s numbers reinforce the importance of strategic patience. While lower prices and reduced competition may present attractive entry points, the broader economic environment still calls for a cautious, research-driven approach.

The rental market remains a bright spot, underpinned by sustained population growth, affordability challenges in homeownership, and limited supply in key urban centers. For investors looking to build or expand rental portfolios, these fundamentals continue to support long-term income potential.

Still, timing will be crucial. Interest rate cuts anticipated later this year may reignite buyer demand and shift market dynamics. At the same time, external variables—including trade developments and evolving federal housing policy—could quickly reshape the investment landscape. Navigating these shifts will require a careful balance between opportunity and risk management.

Looking Ahead: Will Spring Bring a Turnaround?

Spring is traditionally one of the busiest seasons for real estate in the GTA. However, 2025’s trajectory remains uncertain. On one hand, anticipated interest rate cuts by the Bank of Canada may inject new energy into the market. On the other, ongoing economic anxieties, inflation concerns, and unpredictable global trade developments continue to weigh on consumer confidence.

On paper, affordability is improving, inventory is expanding, and overall conditions appear favorable for buyers. Historically, such improvements—combined with increased selection—would trigger a rise in market activity. But this year, buyer sentiment is more nuanced, influenced not just by pricing and availability, but by concerns around employment stability, financing costs, and long-term economic outlooks.

Still, strategic opportunities exist for those who stay informed and act with intention. As Toronto’s real estate market navigates this period of transition, the keys to success remain unchanged: timing, strategy, and staying one step ahead of economic and policy shifts.

Source: TRREB Market Watch