Lisa Bednarski says it’s probably been six years since she’s seen what she would consider a “normal” spring for the Greater Toronto Area’s housing market.
Bednarski, who is a broker and sales representative with the BREL Team, points out that 2020 brought the global pandemic, and in response, the Bank of Canada (BoC) cut the policy interest rate from 1.75% to 0.25%, sparking a frantic period of buying and selling. Then, in March 2022, the central bank reversed course, opting for what would be the first of 10 interest rate hikes, rendering the market sluggish as it absorbed the effects. It hasn’t recovered since.
“Typically, in an offer night scenario, when you have a house and you know that the demand will exceed the supply, we would have 70 showings. And from 70 showings, we might get seven to 12 offers. Now, those same properties are seeing 40 showings and getting two to three offers. I would say the volume is basically half,” says Bednarski. “Interest rate decreases definitely got people stirring, but they're still not motivated.”
Earlier this month, the Toronto Regional Real Estate Association (TRREB) reported that there were just 4,037 home sales in February, which is 27.4% below the year-ago level. Seasonally adjusted, sales were down 28.5% compared to January 2025. Meanwhile, 12,066 new listings came online in the month (up 5.4% year over year) bringing the sales-to-new-listings ratio to 33% and putting the market firmly in buyers’ territory.
Things are expected to stay buyer-favourable as the year progresses, with TRREB forecasting a “well-supplied” market and moderate price growth over 2024.
“Our baseline is some 76,000 transactions within the GTA. So that's low from an historic perspective on an annual basis, and certainly much lower than the record that we saw back in 2021 where we had over 120,000 transactions,” says TRREB’s Chief Market Analyst Jason Mercer. “And there's a reason for that, obviously. First and foremost, we're still seeing borrowing costs elevated, and even with the Bank of Canada cuts we saw in the second half of 2024, and the first quarter of 2025, our polling suggests that there's still a lot of would-be homebuyers that need to see more relief — 100, 200 basis points worth of relief.”
According to Mercer, TRREB was anticipating that there would be “two or three” more cuts from the BoC by the end of spring, at which point the GTA would see an acceleration in home sales in the second half of 2025.
“Now, of course, the wild card is on the back of real and potential tariffs, and there's a lot more uncertainty in the marketplace now. These tariffs, or potential tariffs, would be focused on industries that are concentrated in Southern Ontario,” he says. “And so, notwithstanding lower borrowing costs as we move through the year, people are going to need to be certain that they're going to retain their employment and potentially see their incomes grow over time. At this stage, people are taking a wait-and-see attitude.”
“Buyers don’t want to catch a falling knife”
You should start to see the clues of a healthy spring market in January, says Mercer, with sales volume picking up on a month-over-month basis through to the end of June. “You see more people interested in listing their home for sale, you see more people looking to buy,” he adds. “Weather is one thing, but there’s also families looking to get settled into their new home prior to the start of the next school year. […] In any given year, regardless of where you are in the economic cycle, you're going to have more people with that mindset.”
While that mindset is still there, those with the desire to buy are firmly under the thumb of ‘what if.’ Real estate agent and broker with TMG The Mortgage Group Victor Tran says the overwhelming fear amongst prospective buyers is “fear of overpaying.”
“Every day the real estate inventory is increasing steadily, prices are slowly dropping in some markets, and a lot of buyers don't want to catch a falling knife basically,” he says.
“Let's say someone was to buy a condo for $500,000 and they put the bare minimum down to 5%, which is $25,000, the mortgage would be at $475,000, not including the CMHC default insurance premiums. Once you tack on the premiums, it brings the mortgage balance up to $494,000, so they're at almost 100% of what the property is worth. And if the property value drops, like 1% or 2% in the next month, which is possible, based on what's happening in the world, then the property is worth a lot less than what they owe.”
Although Tran acknowledges that mortgage rates, both fixed and variable, have been coming down for “the past six, seven months now,” he also notes rates are double what they were five years ago, and there’s still a ways to go before most people can afford to enter or move around in the housing market.
“And sure, CMHC and the mortgage insurers have revised their mortgage insurability guidelines, so now you can purchase a home with less than 20% down up to 1.5 million. But still, it's very difficult to qualify for that type of loan based on the averaging income in Toronto, for example,” he says. “And even if they can qualify, it's still really scary to take on a million-dollar loan in today's world.”
“Bursts of activity”
While on the whole, Realtor on Royal LePage’s Key Advantage Team Heather Kennedy agrees that the market has been unseasonably quiet, she says she’s seeing “bursts of activity” and proof that demand is alive and well. Kennedy, who specializes in Aurora and Newmarket and other areas of the York Region, points to 95 Pinnacle in Aurora and 148 Donald Stewart Crescent in East Gwillimbury — listings in her network that recently got multiple offers, “even though they they were not using an offer date strategy.”
“Even in the current slower market I have seen some homes sell over the asking amount. They tend to be around $1.3 million or below, which have a larger buyer pool due to affordability,” she adds. “For example, there have been a few in the Bristol-London area of Newmarket. A home at 315 Exeter was listed for $1,199,888 and sold for $1,250,000. A home at 213 Hampton Court was listed for $998,000 and sold for $1,126,800.”
“What is selling are the homes that pop. Meaning those that are staged beautifully, professionally photographed [and] videoed, extensively marketed with print and digital advertisements on social media,” Kennedy goes on to say. “Buyers are very savvy and do their research online with platforms like HouseSigma and Zolo. If the home looks good the buyers come out in droves, but if it doesn't, they just don't.”
Meanwhile, Bednarski, who specializes in Toronto’s west end, says anything under the $1 million-mark is “getting a lot of traffic.”
“It's very, very, very first-time buyer. The step-up buyers, it's harder for them, because they're not going to make as much money on their current house. […] I have clients right now, they live in a condo townhouse and they want to buy a house, but they want a certain dollar value for their condo townhouse before they start looking,” she says.
“And I keep saying to them that it's a double-edged sword. By the time you get what you want on your townhouse, the market will have shifted, and it will be harder for you to get the house you want. If you're a step-up buyer, and you were to lose 5% on your sale of a million dollars, but save 5% on your buy of $2 million, that actually makes some economic sense, but not everybody's ready to hear that yet.”
In any case, Bednarski says that what we’re seeing are clear signs of pent-up demand. Just because people don't buy, doesn’t mean they don’t need or want to buy. “People falling in and out of love, having a baby, getting divorced, having their parents move in with them, having their kids move out — all of those things that trigger real estate transactions are still happening when the market is quiet. So when the market breaks, it will be like a bottleneck of buyers and sellers,” she says. “I just don't know when that's going to be.”
