The best place to begin this Report is with the good news. May saw 6,244 homes trade hands, the fourth consecutive month of increased, and very welcome, sales.
The pace of sales is still weaker than 2024, which itself was not a strong residential resale year, particularly during its last six months. May’s reported sales were 13.3 percent fewer than May 2024, but more than 10% higher than reported sales in April. Last year 7,206 properties were reported sold. The good news is that each month, beginning in January, the negative variance is becoming smaller, and barring any unforeseen geo-political uncertainty, by the end of July the variance should swing from negative to positive.
The average sale price for May, for all properties sold, including condominium apartments came in at $1,120,879, 4 percent lower than the average sale price of $1,167,646 achieved last year. The average sale price for all property types declined in May, both in the city of Toronto and in the 905 Region, with condominium apartments declining by 7.3 percent in the city of Toronto, where the bulk of the supply of available condominium apartments is located. In the last two years the average sale price of condominium apartments has declined by more than 10 percent, and sales are more than 25 percent lower than May of 2023.
The disproportionate size of condominium apartment inventory, sales, and average sale prices vastly distorts any overall analysis of the Toronto and Region residential resale marketplace.
As we approach the second half of 2025 the market focus is on the swelling size of the Toronto and Region inventory of available properties. In May 21,819 “new” listing came to market. “New” requires some clarification. Many of these new listings, approximately 40 percent, are in fact re-listed properties, properties that have already been on the market, did not sell, and are now back on the market, most often with an asking price reduction. Having said that, 21,819 new listings coming to market in one month is a large number, verging on a record high.
At the end of May there were 30,964 active listings available to buyers, the third highest number of active listings on record. A deeper dive into the data indicates that 34 percent, or 10,523 of these listings are condominium apartments, the worst performing sector of the Toronto and Region resale market. Moreover, almost 7,000 condominium apartments for sale are located in the city of Toronto. The end result is that the swollen Toronto inventory numbers are primarily driven by condominium apartments. Similarly the overall average sale price for all properties sold is also (negatively) influenced by the sale price of condominium apartments.
In May the average sale price for all properties sold came in at $1,120,879, 4 percent less than the average sale price of $1,167,646 achieved last year. The average sale price for condominium apartments was $710,000 in the city of Toronto and only $633,000 in the 905 Region. Average sale prices for detached, semi-detached and townhouse properties, both in the city of Toronto and the 905 Region, were considerably higher.
The Toronto and Region resale market is anything but homogeneous. There are strong pockets, based in housing type and location, and similarly weak market areas, like the condominium sector. The 905 Region as compared to price points for detached, semi-detached, and townhouse homes is less robust than sales of the same property types in the city of Toronto. This fractured marketplace has been evolving since the beginning of 2025 and becoming more prevalent as we move into the second half of the year.
As we move towards the second half of 2025, three major factors will drive the residential resale market, not only in the Toronto Region, but throughout the country. Firstly, the Federal government’s $25 billion housing plan, which includes G.S.T. discounts for first-time buyers, should help stimulate the moribund preconstruction market.
Immigration, supply and affordability pressures. These factors are intricately connected and directly impact the housing market. Immigration numbers are expected to decline which will lessen demand. Supply will remain at historically high levels. Affordability is, to a great extent, dependent on the Bank of Canada and bond yields. A decline in the cost of mortgage financing would have a very positive effect, stimulating sales, which will ultimately bring down supply levels.
Lastly, economic signals, which will vary regionally, will also impact the market. The resale market is already experiencing a decline in average sale prices, modest in the case of ground level housing, and dramatic in the case of condominium apartments. The second half of 2025 may see further declines in average sale prices which will, to some extent, ameliorate consumer affordability pressures, which should result in substantially higher sale numbers. These signals will in turn further stimulate buyer activity.
It is impossible to predict how the resale market will unfold in the second half of 2025. (Generally, markets are impossible to predict). There is, however, optimism, albeit mild, that the second half of the year will produce a marked improvement over the first half, and strong signs that it will far outdistance the second half of 2024. Again, the world appears to be run by erratic leaders. Their decisions can, if they create uncertainty, upend even the most cautious forecasting.
Prepared by Chris Kapches, CEO, Chestnut Park Real Estate Limited, Brokerage
