While still far from recovered, the Greater Toronto Area (GTA) housing market continued to see increased activity in August as home sales grew on a year-over-year basis for the second month in a row. According to the Toronto Regional Real Estate Board (TRREB), there were 5,211 home sales last month, up 2.3% compared to August 2024.
This bump follows a 10.9% annual increase in home sales recorded in the previous month, which was the highest July home sales had been since 2021. On a seasonally-adjusted month-over-month basis, however, sales dipped 15.7% in August from July's 6,100 transactions.
Zooming out, while the period from January to June was substantially weaker this year compared to last year — thanks largely to economic uncertainty from US tariff policies — gains made over the last two months have been promising.
But Cailey Heaps, Founder of The Heaps Estrin Real Estate Team in Toronto, says a full rebound will take time. "There’s a growing sense that we’ve reached the bottom of the cycle. From here, we anticipate a slow but steady climb — no dramatic swings, just incremental progress," she tells STOREYS.
In TRREB's report, the board's president Elechia Barry-Sproule emphasizes that further interest rate relief would help bolster this long-awaited rebound. "With the economy slowing and inflation under control, additional interest rate cuts by the Bank of Canada could help offset the impact of tariffs," she says. "Greater affordability would not only support more home sales but also generate significant economic spin-off benefits."
The Bank of Canada's policy rate currently sits at 2.75%, and while banks like BMO and TD forecast the overnight rate hitting 2.25% as early as Q1-2026, others like Scotiabank see it remaining at 2.75% until Q1-2026, while RBC expects the BoC to hold through the entirety of 2026.
Still, interest rates have come down from 5% since June 2024 and GTA home prices have fallen from an average of $1,193,771 in 2022 to $1,022,143 this August, making it more attainable for some to enter into homeownership. But not all.
“A household earning the average income in the GTA is still finding it challenging to afford the monthly mortgage payment associated with the purchase of an average priced home," said TRREB Chief Information Officer Jason Mercer. "This is even with lower borrowing costs and selling prices over the past year."
Like Barry-Sproule, Mercer calls for further interest rate cuts to spur housing markets.
But while more relief may be needed, listings have been piling up for some time, creating a solid buyers' market for those with the means to make a deal. Active listings have continued to grow each month after hitting a 25-year high in May at 30,964 listings. In August, there were 27,495 active listings, up 22.4% from 2025, and 14,038 new listings were added, up by 9.4% year over year.
Looking ahead, Heaps predicts listings will begin to slow over the next few months, however, as sellers adopt a wait-and-see approach amid a saturated market — something she says may help balance markets in the longer term. "This could actually help to stabilize the market because as existing inventory is gradually absorbed, we may see modest improvements in pricing and buyer confidence," says Heaps. "Those who do hold off will likely list in Q1 or Q2 2026 once conditions improve. This strategic patience could help rebalance supply and demand over time."
On the price front, August saw both the average GTA selling price and MLS Home Price Index Composite benchmark price (HPI) dip 5.2% year over year. Month over month, the HPI remained relatively flat, and the average selling price dropped by about $30k from $1,052,230 in July.
Heading into September, Heaps sees two factors fuelling momentum: families settling into back-to-school routines and re-engaging with the market around mid-September and banks offering promotional mortgage rates of around 3.99% as they approach their fiscal year-end.
"These incentives could spark an uptick in buyer activity, especially among those who have been waiting for more favourable financing conditions," she says. "In real estate, the key to any market is momentum so this could be a really positive driver in the coming months."
