Toronto’s housing market is caught in a real estate slump, with home sales nosediving 20% in March 2025, a stark signal of economic unease.
The Toronto Regional Real Estate Board (TRREB) reported just 5,011 homes sold, down from 6,519 a year ago, while new listings surged 29% to 17,053.
Buyers are hesitating, sellers are stuck, and the city’s once-hot market feels like a car stalled in traffic.
U.S. trade tariffs, a federal election on the horizon, and lingering high interest rates are clouding decisions, leaving many wondering: is this a blip or a new normal?
Let’s dive into what’s driving this slowdown, its ripple effects, and how Torontonian can navigate it.
This real estate slump isn’t just about numbers—it’s about people pausing major life choices.
From young professionals eyeing condos to retirees hoping to cash out, the market’s chill is personal.
Economic uncertainty, like a fog rolling in, obscures clarity, making every move feel riskier.
Yet, beneath the headlines, there’s nuance: opportunities for some, traps for others.
By unpacking the causes, impacts, and strategies, we’ll see why Toronto’s housing market is at a crossroads and what it means for you.
Why Is the Real Estate Slump Happening?
Economic turbulence is the spark behind this real estate slump. U.S. threats of a 10% tariff on Canadian goods have exporters nervous, and households feel the pinch.
When trade wobbles, so does confidence—nobody wants a mortgage if layoffs loom. Statistics Canada noted 33,000 jobs lost in March 2025, erasing late 2024 gains.
This isn’t abstract; it’s why buyers are hitting pause.
Then there’s the federal election, stirring promises and doubts. Will new policies ease costs or add burdens? Nobody knows, so many wait.
Sarah, a 34-year-old tech worker, embodies this. She’s saved for a Liberty Village condo but fears economic fallout.
“If tariffs hit, will my job be safe?” she asks. Her caution mirrors thousands, stalling sales.
Interest rates, though down to 4.25% after Bank of Canada cuts, still sting. For a $800,000 home, monthly payments hover near $4,000—tough when groceries already bite.
TRREB’s Jason Mercer calls it a “wait-and-see” market, with buyers betting on better days.
This real estate slump thrives on doubt, not disaster, but doubt’s enough to freeze deals.
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How Sellers Are Coping in the Real Estate Slump
Sellers face a grind as inventory piles up. Raj, a retiree listing his Etobicoke bungalow, sees it firsthand. “Showings are rare,” he says, despite pricing competitively.
New listings jumped 29%, giving buyers options but leaving sellers like Raj in a bind. He’s now staging smarter, hoping to stand out.
The numbers back Raj’s struggle. TRREB’s March 2025 report shows average prices dipping 2.5% to $1,082,865, with houses lingering longer.
Sellers must adapt—some cut prices, others rent out. Take Lisa, who listed her Scarborough semi-detached. After 45 days of silence, she leased it, covering costs while waiting for buyers.
Creativity is key now. Real estate agent Maria Chen advises virtual tours and minor upgrades, like fresh paint, to spark interest. “Buyers have choices,” she says.
“Make yours pop.” This real estate slump demands flexibility—sellers who pivot, like Lisa, fare better than those stuck in old playbooks.
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Buyers’ Power in the Real Estate Slump
Buyers, once frantic in bidding wars, now hold leverage. More listings mean more negotiating room, a shift not seen since pre-COVID.
Emma, a teacher, snagged a Leslieville townhouse $30,000 below asking after weeks of talks. “I wasn’t rushed,” she says, a rarity in Toronto’s past frenzies.
Yet, hesitation persists. CREA forecasts a 0.3% national price dip to $687,898 in 2025, suggesting stability, not bargains.
Many buyers, like Sarah, wait for deeper cuts, fearing economic shocks. TRREB notes ownership costs fell 12% from 2024, but affordability isn’t enough when trust wanes.
This real estate slump empowers buyers, but only the bold act.
First-timers have a window, though. Down payment assistance programs, like Ontario’s Land Transfer Tax Rebate, ease entry.
Buyers who research—checking TRREB’s monthly reports—spot deals others miss. Emma’s success came from patience and data, not luck. In this real estate slump, knowledge is bargaining power.
Condo Market: A Unique Real Estate Slump
Condos face their own storm. Sales fell 23.5% to 1,400 units in March, hit by oversupply from 2024 completions.
Yet, prices hold near $700,000, buoyed by investors eyeing rentals. Developer Alex kept his downtown unit listed, confident in long-term demand. “Rentals are steady,” he says.
Oversupply doesn’t mean collapse. Toronto’s population growth—over 100,000 annually—fuels housing needs. Still, sellers struggle.
Condo listings rose 32%, per TRREB, flooding the market. Owners like Priya, with a Harbourfront unit, cut her price $15,000 to compete. “It’s tough,” she admits, but she’s hopeful.
Investors play a long game. With rents averaging $2,800 for a one-bedroom, per Rentals.ca, condos remain cash-flow machines.
This real estate slump hits condo sellers harder than investors, who see Toronto’s growth as a bet worth taking. Buyers eyeing condos should act before investor demand tightens supply.
What History Tells Us About This Real Estate Slump
Markets cycle, and Toronto’s seen slumps before. In 2008, sales dropped 17%, but prices held, recovering by 2010. Today’s mix—tariffs, elections—feels trickier, but resilience persists.
CREA’s Shaun Cathcart sees the market “treading water” into 2026, not sinking.
Compare 2017, when foreign buyer taxes cooled sales briefly. Toronto bounced back, driven by demand. Now, with 5,011 sales against 17,053 listings, the gap feels wider.
Still, immigration and tech growth anchor the city. This real estate slump is a hiccup, not a heart attack, but timing matters.
Analogies help here. Think of the market like a river hitting rapids—choppy, not deadly. It’ll find calm, but when? Buyers banking on crashes may wait forever; sellers clinging to 2022 prices risk stagnation.
History says adapt, don’t panic, in a real estate slump.
Strategies to Navigate the Real Estate Slump
Buyers should strike strategically. With listings up, lowball offers aren’t rude—they’re smart. Research comparables via HouseSigma to justify bids.
Emma’s $30,000 discount started with data, not desperation. Pre-approvals also signal seriousness, giving an edge in talks.
Sellers need flair. Raj added a virtual tour and repainted his bungalow’s exterior, netting two offers after months of silence.
Price realistically—TRREB’s price index is a guide. Renting out, like Lisa did, covers mortgages while waiting. In this real estate slump, standing out is non-negotiable.
Long-term thinkers win. Investors like Alex buy condos for rentals, eyeing Toronto’s 3% annual population spike.
Buyers and sellers alike should track Bank of Canada moves—rate cuts could thaw the market. Flexibility, not fear, turns this real estate slump into opportunity.
Conclusion: Finding Clarity in the Real Estate Slump
Toronto’s real estate slump—with sales down 20% and listings soaring—feels like a storm, but it’s not the apocalypse.
It’s a market pausing, not plummeting, driven by trade fears, election noise, and rates that still pinch. Sarah, Raj, Emma, and Alex show it’s personal: dreams delayed, plans reworked.
Yet, Toronto’s pulse—growth, demand, resilience—beats on.
What’s next? Nobody’s got a perfect map, but history hints at recovery, maybe by 2026 if tariffs ease or confidence returns.
Buyers have power now; sellers need savvy. Will you move or wait in this real estate slump? That’s the question shaping Toronto’s future. Act with eyes open, and you’ll weather the rapids.
Frequently Asked Questions
Is now a good time to buy in Toronto?
Buyers have leverage with more listings and softer prices, but economic risks linger. Research and negotiate to snag deals.
Should I sell during this slump?
If you must sell, price competitively and stage well. Renting out can bridge the gap if you can wait.
Will prices crash in 2025?
CREA predicts a 0.3% dip nationally, not a crash. Toronto’s demand suggests stability, but patience is key.
How do condos fare in this market?
Condo sales are down, but investor demand keeps prices steady. Oversupply means sellers must compete harder.
Sources: TRREB March 2025 Report, CREA April 2025 Forecast, Statistics Canada March 2025 Labour Report, Rentals.ca April 2025 Data.