What 2025 Taught Us and What Comes Next

As we close out 2025, the Greater Toronto Area real estate market has clearly entered a new phase. This past year has been characterized by adjustment, patience, and recalibration, along with improved affordability and early signs of recovery.

The December 2025 TRREB Market Watch provides a clear snapshot of where the market finished the year and offers valuable clues about what buyers and sellers can expect heading into 2026.

December 2025 at a Glance

• Home sales: 3,697 (↓ 8.9% year-over-year)
• New listings: 5,299 (↑ 1.8% year-over-year)
• Average selling price: $1,006,735 (↓ 5.1% year-over-year)
• MLS® HPI Composite: ↓ 6.3% year-over-year
• Average days on market: ~31–34 days

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December remained a quieter month for transactions, as is typical seasonally, but the broader story is one of stabilization rather than decline.

How 2025 Finished Compared to 2024

Full-Year 2025 Results

• Total GTA sales: 62,433 (↓ 11.2% vs. 2024)
• New listings: 186,753 (↑ 10.1% year-over-year)
• Average price (2025): $1,067,968 (↓ 4.7% vs. 2024)

This combination of more listings, fewer sales, and lower prices helped restore balance to a market that had been overheated just a few years ago.

From a strategic standpoint, 2025 was a year where:

• Buyers regained negotiating power
• Sellers had to price more accurately
• Affordability slowly improved

Price Performance by Home Type (December 2025, YoY)

• Detached: ↓ ~7–8%
• Semi-Detached: ↓ ~11%
• Townhomes: ↓ ~7%
• Condo Apartments: ↓ ~9%

Higher-priced segments continued to feel affordability pressure, while entry-level and mid-range homes remained the most resilient. Condos stayed active but competitive, particularly in investor-heavy areas.

Economic Backdrop: A Turning Point

The December report highlights an important point: the broader economy held up better than many expected.

Key indicators:

• Inflation continued trending closer to the Bank of Canada's target
• Employment remained relatively stable
• Mortgage rates eased compared to earlier in the year
• GDP data surprised to the upside

TRREB summarized it well:

“The GTA housing market became more affordable in 2025 as selling prices and mortgage rates trended lower. Improved affordability has set the market up for recovery.”

This matters because housing recoveries are not driven by headlines; they're driven by confidence, and confidence begins with economic stability.

What December Tells Us About Early 2026

While December sales were modest, several underlying signals point toward a gradual shift:

• Inventory is elevated but no longer growing rapidly
• Buyers are active, just selective
• Price declines are slowing compared to earlier in the year
• Pent-up demand continues to build on the sidelines

Historically, markets often turn before rate cuts fully materialize, and early 2026 may reflect that pattern.

What This Means for Buyers

For buyers, the end of 2025 represents one of the most strategic entry windows we've seen in years:

• More choice
• Less competition
• Negotiation leverage
• Improved affordability compared to 2022–2023

As interest rates eventually trend lower, today's conditions may not last.

What This Means for Sellers

Sellers heading into 2026 should focus on:

• Accurate pricing from day one
• Strong presentation and marketing
• Understanding their specific neighbourhood dynamics

Well-priced, well-prepared homes are still selling even in a cautious market.

Final Thoughts: 2025 Was a Reset Year

2025 wasn't about rapid appreciation or bidding wars. It was about resetting the market to a healthier foundation.

With affordability improving, economic conditions stabilizing, and buyer confidence slowly rebuilding, the GTA market is better positioned today than it has been in years.

The key question for 2026 isn't whether activity returns; it's how quickly.

Thinking About Buying or Selling in 2026?

Every neighbourhood — from Durham Region to the broader GTA behaves differently.

If you'd like a personalized strategy or a breakdown of the local market, I'd be happy to help you plan your next move with clarity and confidence.

Eldon King

RE/MAX Hallmark First Group Realty Ltd.

📞 416-888-4524

📧 eldonking.remax@gmail.com

🌐 eldonkinghomes.com

IG: @eldonkinghomes