After years of relentless bidding wars, double-digit price gains, and “fear of missing out” driving record-breaking sales, Toronto’s real estate market has entered a new era—one defined by balance, patience, and strategy.
Today’s market looks vastly different from the frenzied post-pandemic years. Inventory has surged, prices have moderated, and buyers are taking their time. According to industry experts, homes that once sold in days now linger on the market for weeks, with the average property taking 30 days or more to sell.
“As a buyer, you’ve never had this much choice,” says Toronto realtor Danielle Demerino. “Inventory keeps climbing, and selection is broad. But sellers are having to adjust—many are accepting prices roughly 18% below the 2022 peak.”
A Market Reset in Motion
Rising borrowing costs and affordability pressures have shifted Toronto’s housing psychology. Most buyers today aren’t chasing investments or flipping properties—they’re moving because of life events: marriage, relocation, growing families, or downsizing.
Meanwhile, move-up buyers—those looking to transition into larger homes—are capitalizing on the market correction. “They may sell for less,” Demerino notes, “but they’re buying their next property at an even bigger discount.”
Sales Up, Prices Down
Recent data underscores this shift. In September 2025, sales volume rose 8% year-over-year, signaling that demand is stabilizing. However, average prices fell nearly 5%, showing that sellers continue to adjust expectations in line with higher inventory levels and cautious buyer sentiment.
Developers Hit Pause
The slowdown isn’t limited to resale properties. New construction activity has plummeted. Developers have hit the brakes, with housing starts down nearly 90% compared to previous years. This development freeze could trigger an opposite problem within a few years: a shortage of new housing supply.
“We’re heading into a period where fewer projects break ground,” warns Demerino. “That means three to five years from now, Toronto may be facing another undersupply crisis.”
The Interest Rate Factor
The Bank of Canada’s recent 25-basis-point rate cut to 2.25% is expected to provide mild relief. Lower borrowing costs may motivate some hesitant buyers to act—but experts caution that it won’t spark a sudden boom.
“It might nudge fence-sitters into making a move,” says Demerino, “but the market’s recovery will be gradual. Most people want to see where rates and the economy go before making major decisions.”
The Bottom Line: A Healthier Market Ahead
While sellers face longer listing times and slimmer offers, the cooling trend is restoring balance—a long-missing ingredient in Toronto’s housing ecosystem. Buyers are regaining leverage, negotiations are back, and affordability is inching toward a more sustainable range.
At Lendworth, we view this phase as a self-correcting cycle—one that paves the way for more realistic pricing, better opportunities for first-time buyers, and a more stable long-term foundation for investors.
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