Is the Toronto Real Estate Market Finally Turning a Corner?
For many potential homebuyers and investors, the Toronto real estate landscape has felt like a rollercoaster over the last few years. However, recent data from May suggests a significant shift in momentum. While prices are still navigating a downward trend, the volume of activity is sparking new conversations about the future of the Greater Toronto Area (GTA) market.
A Surge in Sales: The Highest Volume Since Late Last Year
May brought a breath of fresh air to the market, marking the largest number of transactions since November of last year. According to the Toronto Regional Real Estate Board (TRREB), there were 5,364 sales in the Toronto region last month.
This growth isn’t just a minor fluctuation. Sales climbed by 10% compared to April (on a seasonally adjusted basis) and surged 14% compared to May 2025. This spike indicates that lower home prices are finally enticing buyers back into the arena.
The Inventory Paradox: Fewer Listings, But Prices Still Slide
Interestingly, as buyer demand increases, the supply of homes is tightening. New listings dropped by 2.1% from April to May and have plummeted 16% year-over-year. Typically, low inventory coupled with high demand leads to a price jump, but the GTA is currently experiencing a “skittish market.”
The TRREB home price index—which filters out extreme high-end transactions to provide a more accurate average—fell 0.2% to $927,800 month-over-month. This suggests that while more people are buying, they are still exercising significant negotiating power.
Regional Breakdown: Where are the Biggest Drops?
The price decline isn’t uniform across the region. The areas surrounding the City of Toronto have seen much sharper decreases than the urban core:
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- York Region: The home price index dropped by 9.5% year-over-year.
- Peel Region: Prices saw a decrease of 7.6% over the same period.
- City of Toronto: The index remained more resilient but is still 5.4% lower than a year ago.
The Condo Crisis: A Market Flooded with High-Rises
When looking at property types, condos are bearing the brunt of the correction. While resale condos are more affordable than new builds, an abundance of high-rise units is currently flooding the market, driving values down.
In Peel, York, and Durham, the typical condo price has plummeted by more than 10% over the last 12 months, reflecting a growing investor hesitation toward residential real estate.
Looking Ahead: What Does This Mean for Buyers?
The current typical home price in the Toronto region is now 32.6% below the peak of the pandemic-era boom seen in the spring of 2022. This decline is largely attributed to higher mortgage rates and a shift in investor sentiment.
“Inventory levels trended lower over the past year, but buyers continued to have substantial negotiating power through the spring,” says Jason Mercer, TRREB Chief Information Officer.
The big question remains: Will prices start to rise again? Mercer suggests that if sales continue to outpace new listings later this year, we could see a reversal in the price trend. For those looking to enter the real estate market, the window of high negotiating power may be closing, but the current dip offers a strategic entry point for long-term growth.
