The Greater Toronto Area (GTA) real estate market continued to offer buyers more options in February 2025, but sales activity remained subdued compared to last year. While new listings increased, home sales declined significantly, reflecting cautious buyer sentiment amid high mortgage rates and economic uncertainty. However, expectations of lower borrowing costs in the coming months could shift the market dynamics as the year progresses.
Market Overview: More Listings, Fewer Sales
GTA REALTORS® reported 4,037 home sales through TRREB’s MLS® System in February 2025, marking a 27.4% decline from the 5,562 sales recorded in February 2024. Meanwhile, new listings increased by 5.4%, reaching 12,066 compared to 11,443 in February 2024. With supply growing at a faster rate than demand, buyers continued to benefit from increased negotiating power and a broader selection of homes.
The MLS® Home Price Index Composite benchmark declined 1.8% year-over-year, while the average selling price fell by 2.2% to $1,084,547, compared to $1,109,450 in February 2024. Month-over-month, seasonally adjusted prices also edged lower, reflecting the ongoing hesitancy in the market.
Home Prices by Property Type
Price trends varied by housing type, with detached homes remaining relatively stable, while semi-detached homes, townhouses, and condos saw moderate declines.
- Detached Homes: $1,445,879 (+0.2% YoY)
- Semi-Detached Homes: $1,079,996 (-4% YoY)
- Townhomes: $911,483 (-2.3% YoY)
- Condo Units: $688,055 (-1.3% YoY)
While prices softened across most segments, detached homes continued to hold their value, likely due to their appeal among move-up buyers and those looking for long-term investment stability.
Decline in Sales Across All Property Types
Home sales fell across all housing types, with the most significant declines seen in detached homes and townhouses:
- Detached Homes: 1,706 sales (-31.1% YoY)
- Semi-Detached Homes: 356 sales (-22.3% YoY)
- Townhomes: 700 sales (-30.6% YoY)
- Condo Units: 1,225 sales (-22% YoY)
The slowdown in sales suggests that many buyers are adopting a “wait-and-see” approach, anticipating further interest rate cuts or improved economic conditions before committing to a purchase.
Time on Market Extends Further
The average time on market (PDOM) continued to rise, reaching 43 days in February 2025, compared to 37 days in February 2024, marking a 16.23% increase. This trend underscores the shift toward a buyer’s market, where increased inventory allows for more time to make purchasing decisions and negotiate pricing.
Economic and Political Uncertainty Weighing on Buyer Confidence
Beyond affordability concerns, market hesitation may also be attributed to broader economic uncertainty. TRREB noted that uncertainty regarding Canada’s trade relationship with the United States could be influencing consumer confidence. With an Ontario provincial election recently concluded and federal politics in flux, potential buyers may be waiting for clearer policy direction before making long-term financial commitments.
However, the outlook for 2025 remains cautiously optimistic, with expected interest rate cuts likely to improve affordability and bring sidelined buyers back into the market. If borrowing costs decline further, the second half of the year could see renewed market activity.
Looking Ahead: Market Poised for a Shift?
While February’s numbers show a cooling market, the fundamentals for a rebound are in place. With interest rate reductions on the horizon, buyer confidence could improve, leading to stronger sales in the latter half of the year. Additionally, new listings continue to rise, which should help keep prices stable and offer buyers a wider selection of properties.
Navigating the Market with Team McDadi
In a market that continues to evolve, having expert guidance is crucial. Whether you’re looking to buy or sell, Team McDadi is here to provide strategic insights and expert negotiation skills to help you achieve your real estate goals. Our extensive network and established relationships with top mortgage professionals, real estate lawyers, and industry experts ensure a seamless buying or selling experience.
The market is constantly changing, but Team McDadi stays ahead of the trends to help you make informed decisions with confidence.
If you’re ready to buy, explore our active listings here.
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