A Cooler Month, But Buyers Hold the Advantage
February 2025 delivered another month of subdued sales across the Greater Toronto Area (GTA) real estate market—but for buyers, the upside was choice. TRREB reported just 4,037 sales through the MLS system, marking a 27.4% decline compared to the same time last year. However, new listings climbed 5.4% year-over-year to reach 12,066. That surge in inventory gave buyers the upper hand in negotiations, especially those less reliant on financing.
So why the slowdown? In a word: affordability. Mortgage rates are still biting into monthly budgets, keeping many would-be buyers on the sidelines – the desire to buy is there, but the numbers don’t yet pencil out for the average household.
Average Prices Dip—But There’s Context
With demand down and supply up, prices followed suit. The average selling price across the GTA landed at $1,084,547 in February—down 2.2% from a year earlier. The MLS Home Price Index (HPI) Composite benchmark dipped 1.8% over the same period.
Month-over-month metrics (adjusted for seasonality) also edged slightly lower, suggesting softness in the short term. But this isn’t necessarily a red flag. Market lulls this time of year aren’t unusual, and we’re still navigating some choppy economic waters.
Confidence in Limbo: Rates, Trade & Political Unknowns
Beyond borrowing costs, there’s a broader confidence issue brewing. TRREB Chief Market Analyst Jason Mercer highlighted that some buyers appear to be adopting a wait-and-see mindset. Concerns about Canada’s trade relationship with the U.S. and uncertainty around provincial and federal housing policies have added to the hesitancy.
What happens next may come down to two things: policy clarity and interest rate direction. A decline in borrowing costs—which many economists expect by mid-2025—could help reinvigorate the market. But consumers will likely want more reassurance about economic stability before jumping in.
What to Watch for This Spring
There’s still room for optimism as we move toward the busier spring market. A few key things to watch:
- Rate relief: Even a modest drop could expand affordability for first-time buyers.
- Inventory pressure: With listings up, sellers may need to sharpen their pricing.
- Confidence comeback: If political and trade tensions cool, pent-up demand could be unleashed.
We’re not in recovery mode just yet—but the foundation is being laid.
Should You Buy Now or Wait?
The answer depends on your situation. For upsizers, downsizers, and cash-ready buyers, today’s inventory-heavy market offers more choice and more leverage than we’ve seen in years. If you’re in a position to act, this lull could be an opportunity.
That said, if your budget is tightly tied to interest rates, waiting a few more months could mean accessing more purchasing power.
One thing remains clear: Toronto’s real estate market is still very neighbourhood-driven. While the overall stats show a slowdown, specific pockets might tell a different story. As always, smart strategy starts with local insight.
Want to chat further? Send us a message below!
