Toronto Real Estate: Notes from the May 2025 Market
A personal perspective on a market in motion
I’ve been thinking a lot lately about how much the mood of the real estate market mirrors life itself.
Some months it feels like you’re holding your breath—waiting for clarity, for direction. Other times, there’s movement. Not always dramatic, but enough to remind you that change is always in motion, even when it’s subtle.
That’s what May 2025 feels like in the Toronto real estate market. A quiet shift after a period of hesitation. The signs of life are starting to return.
Let me walk you through what’s happening, how it compares to the months before, and most importantly—what it means for you.
A Market Emerging from Uncertainty
April was a month of waiting. The federal election took centre stage, and as it often does, it made people pause. When people aren’t sure about leadership, policy, or what the future looks like—whether consciously or not—they wait to make big decisions.
And in real estate, waiting can create a bit of a bottleneck.
Here’s what happened:
📉 5,601 homes sold in April 2025 - That’s a 23.3% drop from the year before.
📈 18,836 new listings hit the market - That’s an 8.1% increase year-over-year.
💰 Average selling price? $1,107,463 - Down 4.1% from April 2024, and also slightly lower than March 2025 on a seasonally adjusted basis.
In other words, sales dropped, listings climbed, and prices slipped.
You can feel the tension, right? Sellers want last year’s prices. Buyers are hyper-focused on affordability. And yet, here’s the most important part:
➡️ Following the election, we saw an immediate uptick in showings, offers, and overall activity.
It’s not a boom. But it’s a pulse. And that matters.
The Resale Freehold Market: Who’s Moving Now?
The freehold market is in what I’d call a price-sensitive repositioning. Sellers who don’t adjust expectations are either pulling listings off the market or watching them stagnate.
But here’s the thing: the ones who do adapt are getting results.
Buyers aren’t chasing fantasy numbers anymore. They’re looking for value. If you’re priced right—and offering quality—you’ll still get traction.
Key Takeaway:
🧭 Smart sellers are meeting the market. Stubborn sellers are missing it.
This isn’t a time for “testing the waters” with aggressive pricing. It’s a time for strategy.
What’s Fueling the Caution?
Three main ingredients:
The federal election (now behind us) created a temporary pause.
Global trade uncertainty made investors and end-users nervous.
Affordability concerns—with mortgage costs still high—kept buyers cautious.
But change is coming.
The Bank of Canada is now expected to cut interest rates twice before the end of 2025. That news alone has already shifted the mood.
In short: people are tired of waiting. And if borrowing becomes more affordable, we’re likely to see a late spring and summer surge in activity.
Inventory Is Up: Why That’s a Good Thing
Let’s not overlook the listings.
We saw 18,836 new listings in April—8.1% more than last year.
That’s the highest April inventory in several years.
More inventory means:
✅ More choice for buyers
✅ More breathing room in negotiations
✅ Less pressure for rushed decisions
This is what a balanced market looks like when it’s forming. For the first time in years, it doesn’t feel like a race—it feels like a conversation.
How Buyers Should Approach This Market
This is, quite honestly, one of the most strategic buyer environments we’ve had in a long time.
Here’s why:
Prices have softened year-over-year
Listings are up, so you have options
The market is still quiet—but not for long
Rates are likely coming down, which will boost competition soon
If you’re a first-time buyer, this is your signal. Waiting too long could mean walking back into bidding wars and pressure.
If you’re moving up, this is your window to buy before the next wave of buyers joins you in the market post-rate cut.
Buyer Notes:
📌 Don’t over-negotiate yourself out of a good deal
📌 Get pre-approved now—rates may shift quickly
📌 Look at homes sitting more than 21 days—they’re where the deals live
What Sellers Need to Know Right Now
I’ll be honest—this market can be humbling for sellers who haven’t recalibrated.
Last year, you could price ambitiously and let the market catch up. That playbook is outdated.
Today, buyers are cautious, calculated, and patient.
But the moment interest rates drop and confidence returns? That caution will turn into action—and properly priced homes will fly.
Seller Notes:
✅ Price based on 2025, not 2022 dreams
✅ Stage and prep well—first impressions matter more than ever
✅ Know your competition and position yourself better
✅ If you’re selling to buy—remember: you’ll also be buying in this market.
Investor Pulse: Are They Coming Back?
Here’s where things get interesting.
Last month’s report showed that 39% of Ontario condos are investor-owned, and falling rents + rising vacancies had many debating whether to hold or sell.
Now, as talk of rate cuts increases, savvy investors are quietly starting to re-enter the conversation—especially those focused on capital appreciation over cash flow.
Condos that are well-priced in prime locations are getting attention again. Rental yields may still be soft, but investors are banking on two things:
Future rate cuts = price appreciation
More immigration = eventual rental demand rebound
It’s not 2021 euphoria, but it’s not 2023 fear either. It’s cautious optimism.
What About Prices? Are They Still Falling?
The average price in April 2025 was $1,107,463
That’s down 4.1% from April 2024
But—and this is important—it’s also a seasonally adjusted month-over-month decline.
In plain English? Prices softened slightly in April compared to March, but not dramatically.
What that tells me: We’ve likely found the floor. We’re bumping along the bottom right now. The next meaningful move is more likely up than down, especially if rates ease.
Let’s Zoom Out for a Moment
Sometimes it’s hard to make sense of a market by just looking at the month-over-month or year-over-year data. So let’s take a breath and look at what’s really happening in this cycle.
2021–2022: Pandemic-fuelled growth
Late 2022–2023: Sharp rate hikes and demand collapse
2024: Volatile but recovering, as rates stabilized
Early 2025: Election and trade anxiety pressed pause
Now: Pause ending. Cautious activity returning. Buyers watching rates closely.
We’re in what I’d call the reacceleration phase. Not boom. Not bust. A quiet build-up.
So What Should You Do Now?
Here's a simple breakdown based on who you are:
🧍♀️First-Time Buyers
Get pre-approved now
Watch listings that have sat >21 days
Don't wait for rates to drop—prices might jump first
Focus on livability, location, and growth potential
👨👩👧👦 Move-Up Buyers / Sellers
If you’re selling and buying, this is your moment
Sell in a calm market → buy in the same
You’ll avoid bidding wars and can negotiate both ways
💼 Investors
Rents are still soft, but values are attractive
Prime units in great locations = best long-term bets
Watch for end-of-year rate cut boosts
Focus on quality tenants and long-term appreciation
🏘️ Sellers
Get pricing advice from a local expert
Don't chase the market—lead it with smart strategy
Prep your home—photos, staging, and presentation matter more than ever
Be ready to act quickly once the market reactivates
Final Thoughts: The Market Feels Human Again
There’s a rhythm to real estate. Sometimes it surges. Sometimes it stalls. But every now and then, it balances—and in that balance lies real opportunity.
That’s where we are now.
Buyers aren’t frenzied. Sellers aren’t greedy. There’s room for thoughtful conversations, smart deals, and confident decisions.
So whether you’re buying your first place, upsizing with your family, or finally listing the investment you’ve held for years—this is a moment worth understanding.
And if you need help making sense of it?
That’s what I’m here for.
Want personalized guidance for buying or selling this spring?
Reach out and let’s talk strategy.
This market rewards preparation and the best time to prepare is always before the next surge.