GTA Buyer Activity Returns as Price Corrections Deepen Across Most Property Types

The Greater Toronto Area housing market continued to adjust in August, with average prices extending their downward trend for a third consecutive month. While values have retreated to their lowest level since early 2021, the correction has coincided with a modest resurgence in buyer activity, as sales recorded another year-over-year increase.

Property values across the GTA declined by 1.7 per cent in May, a further 4.5 per cent in July, and August continued the downward trajectory with another 2.8 per cent monthly decrease. The average sales price now sits at $1,022,143, the lowest level since February 2021. Noteworthy, home sale prices are down 23 per cent from the peak of $1,334,544 recorded in February 2022.

Buyers wrote 5,211 transactions in August, marking the third straight month of year-over-year sales gains. Equally notable was the reduction in active listings. Inventory has pulled back from the June peak of more than 31,000 active listings to 27,495, a 13 per cent decline.

The combination of stronger buyer demand and fewer active listings could create a more competitive marketplace as the year progresses. Sellers, however, appear increasingly willing to accept less than their asking price. The sales-to-list price ratio has eased to 97 per cent, down from a high of 100 per cent in March. Even with recent momentum, the market remains far from its historical norms: inventory is 80 per cent above the ten-year August average, while sales remain 30 per cent below their long-term precedent.

A recently released Royal LePage survey shed light on a potential trend with broader implications. The report noted that “concerns about the current American administration are the top driver for Canadians selling their homes south of the border.” Phil Soper, president and CEO of Royal LePage, explained: “With so many Canadians citing concerns about the U.S. administration as a key reason for divesting, it’s evident that political instability is no longer just a talking point – it’s a catalyst for change. This shift in sentiment is reshaping how Canadians think about cross-border investment. As uncertainty continues to cloud the U.S. political landscape, we anticipate more Canadians will redirect their capital into domestic real estate, reinforcing long-term confidence in Canada’s housing market and creating new opportunities for growth closer to home.”

While it may take time before the effects of Canadians selling U.S. properties show up locally, buyers seeking value may find detached homes particularly appealing. Detached values dropped sharply again in August, falling $49,090, or 3.6 per cent in just one month, and are now down 8 per cent since May. Prices have returned to early 2021 levels and sit 27 per cent below their peak, historically a strong signal of a buying opportunity as the market appears to be testing its threshold lows.

Condominium values also continued to decline. After a steep 6.45 per cent drop in July, prices slipped another 1.4 per cent in August, bringing the average sales price to $642,195, the lowest since February 2021. Sales activity pulled back after seven consecutive months of increases, dropping 13 per cent for a total of 1,369 transactions. Condo inventory reached 9,105, up 9.23 per cent from last August, though notably this was the first month in over two years where annual inventory growth did not reach double digits.

Townhomes stood out as the only asset class to record a price increase. Values rose by 1.8 per cent to $946,395. Active listings pulled back 12 per cent on a monthly basis, while sales reached 541, up 9 per cent compared to August 2024.

The semi-detached segment, by contrast, slipped below the $1 million threshold for the first time since August 2022. The average semi-detached home sold for $980,102, representing a 10.32 per cent loss over the past two months. Sales dropped sharply to 441, a 26 per cent monthly decrease, while inventory remained elevated at 1,485 active listings, 83 per cent above the long-term August norm.

“Compared to last year, we have seen a modest increase in home sales over the summer. With the economy slowing and inflation under control, additional interest rate cuts by the Bank of Canada could help offset the impact of tariffs. Greater affordability would not only support more home sales but also generate significant economic spin-off benefits,” said TRREB President Elechia Barry-Sproule.

August ultimately marked the continuation of price declines across most property types, with detached and condo values sliding back to 2021 levels. Yet sales have now recorded three straight months of year-over-year gains, and inventory is trending lower from summer peaks. These developments suggest improving buyer confidence and the potential for a more competitive marketplace as the year moves forward.

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