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What Homebuyers and Investors Need to Know in Summer 2025

As we move through the summer of 2025, Toronto’s real estate market is presenting a mix of caution and opportunity for both homebuyers and investors.

After years of intense growth followed by a post-pandemic cooldown, the city’s housing sector is in a period of recalibration—marked by more balanced conditions, modest price adjustments, and evolving buyer behaviour.

Market Snapshot: Supply Stabilizing, But Demand Remains Soft

According to recent data from the Toronto Regional Real Estate Board (TRREB), average home prices in the Greater Toronto Area have decreased by roughly 5% year-over-year, now sitting at approximately $1.1 million. Sales volume has also dipped, with many neighborhoods seeing longer days on market and fewer bidding wars compared to previous summers.

This cooling is largely driven by:

  • Elevated borrowing costs, despite recent Bank of Canada rate cuts
  • Slower population growth, particularly in temporary foreign worker and student categories
  • Buyer uncertainty amid mixed economic signals

However, while national trends point to continued softening, Toronto remains fundamentally undersupplied in housing. This provides long-term support for values—especially in key transit-oriented and urban infill areas.

Where Opportunities Lie: Renovation, Infill & Rental Conversions

With new construction facing delays and affordability constraints squeezing first-time buyers, homeowners and investors are increasingly looking at creative alternatives:

  • Renovation loans and second mortgage financing are on the rise, allowing families to upgrade instead of relocate.
  • Basement apartments and laneway suites continue to gain popularity, helping offset mortgage costs and generate rental income.
  • Multi-family conversions in older Toronto homes are appealing to both investors and multi-generational families.

At Lendworth, we’re seeing strong demand for short-term renovation financing and equity takeouts—especially in East York, Scarborough, and parts of North York where value-add opportunities are still accessible.

Investor Insight: Focus on Cash Flow and Location

For investors, the key to success in this market is a focus on fundamentals:

  • Buy for cash flow, not speculation—ensure your rental income supports debt service
  • Prioritize transit-accessible neighborhoods with low vacancy rates
  • Consider alternative lending options if conventional financing falls short

Lendworth continues to support investors with flexible mortgage solutions—including interest-only terms, construction financing, and equity-based second mortgages.

Final Thoughts

Toronto real estate may no longer be the runaway seller’s market it once was, but it’s far from distressed. In this more measured environment, strategic buyers, investors, and homeowners can find real opportunities—particularly if they have the right financing partners.

Thinking about your next move in Toronto real estate?

Connect with Lendworth for a personalized lending solution tailored to today’s evolving market.

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