More Listings, Lower Sales, changing month over month trends, and an Eye on Affordability
The GTA real estate market in February 2025 continued to give buyers more options, with inventory levels staying high. However, sales slowed compared to last year, reflecting ongoing economic uncertainty. Weather incidents always make this time of the year a little bit unpredictable, however, despite the YoY slowdown, we saw positive upticks from Jan 2025 to Feb 2025. See the section below.
According to the latest TRREB Market Watch report, 4,037 homes were sold in February 2025—a 27.4% decline from the same time last year. At the same time, new listings increased by 5.4% year-over-year, shifting more negotiating power to buyers. The average selling price of $1,084,547 represents a 2.2% dip from last year’s $1,109,450, highlighting how affordability is playing a critical role in market momentum.
Total Home Sales: 4,037 (-27.4% YoY)
New Listings: 12,066 (+5.4% YoY)
Average Price: $1,084,547 (-2.2% YoY)
Days on Market (DOM): 28
Active Listings: 19,536 (+76% YoY)
It’s worth noting that external factors, including weather patterns and broader economic conditions, contributed to these trends.
(Source: Edge Analytics)
With sales slowing and inventory climbing, buyers gained more negotiating power—particularly in higher-priced segments.
Higher mortgage rates continued to strain affordability, keeping some buyers on the sidelines. However, with anticipated rate cuts in the coming months, we could see a shift in buyer confidence and more market activity later in the year.
TRREB Chief Market Analyst Jason Mercer pointed to concerns around Canada’s trade relationship with the U.S. and economic volatility as reasons some buyers are delaying their purchases.
2024 saw record condo completions in 416, which led to oversupply in the leasing and assignment market. Condo competitions in 416 are expected to be less than half last year's. We are already seeing an early trend of drop in lease listings and leases have picked up considerably over the past 2 weeks. We will watch this data closely to see how it plays out, but this will be positive news for investors and the market!
Detached Homes: Sales were down 19.4%, but prices held relatively steady.
Condos: The largest decline, with sales down 32.3%, as affordability pressures hit this segment the hardest.
Prices remained stable overall, but higher-priced homes saw deeper discounts due to reduced demand.
While real estate is best viewed through a long-term investment lens, month-over-month trends provide insight into where the market could be heading:
If these trends continue into spring, it could signal a gradual return of buyer confidence.
The GTA real estate market in February 2025 faced additional pressures from broader macroeconomic factors, including:
With buyers hesitant and the economy in flux, the market is experiencing a wait-and-see approach—but that doesn’t mean it will stay this way.
Market cycles are nothing new, and history has shown that real estate remains a strong long-term investment.
Temporary Market Corrections – The 1990-1996 downturn and 2017-2018 mortgage stress test both led to short-term slowdowns, but the market rebounded.
Affordability Cycles Drive Demand – Data from 2008-2009 and 2017-2018 show that once rates stabilize or drop, buyers return quickly.
Price Growth Trends Stay Strong – TRREB’s historical data confirms that GTA real estate prices have consistently grown over the decades.
The takeaway? Short-term fluctuations are part of the cycle, but long-term fundamentals remain strong.
Potential Interest Rate Cuts – The Bank of Canada is expected to lower rates, which could reignite buying activity.
Housing Policies & Supply Initiatives – Federal and provincial efforts to address affordability will play a role in market demand.
Increased Competition in Prime Areas – If borrowing costs drop, expect more competition for well-located properties.
Market Volatility = Buying Opportunities – Investors today have more negotiating power
Rising Construction Costs – This could push pre-construction prices higher, leading to stronger long-term appreciation.
Rental Demand on the Rise – Affordability constraints are keeping more people in the rental market, boosting rental income potential.
Longer Selling Periods – With buyers being more cautious, homes are taking longer to sell.
Negotiation is Key – Buyers have more power, so sellers need to be strategic with pricing.
Market Uncertainty = Hesitation – Sellers looking to upgrade or downsize may be waiting for more stability before making a move.
February’s data suggests that the market is moving toward a more balanced phase, where buyers have negotiating power while prices stay relatively stable.
For those looking to buy, this could be a strategic time to secure a deal before interest rate cuts drive more competition.
For sellers, adjusting to current market conditions and pricing competitively will be key to attracting serious buyers.
As always, working with an experienced real estate professional can help navigate market trends and identify the right opportunities.
Stay tuned for next month’s update as we track key shifts heading into the spring season.
