GTA home prices decreased in the second quarter of 2025 compared to 2024. Will prices continue to drop?

Home prices in the Greater Toronto Area fell in the second quarter of 2025 compared to the same period in 2024. The average house price dropped by 3 per cent year-over-year to about $1,155,300. That marks a clear shift, as buyers face lower prices amid a slow market.

Many buyers are now finding better value as more homes become available. In June, the average Toronto price stood about 5.5 per cent lower than a year ago, with notable declines across home types: single-family homes dropped roughly 5.9 per cent, townhouses by 7.1 per cent, and condos by 8 per cent. With greater choice and softer prices, buyers have more negotiating power.

Still, experts expect the market may begin to firm up later in the year. While the first half of 2025 saw prices decline, the second half may bring stabilization—even if modest. In Ontario and B.C., quarterly growth is expected to remain weak, but there could be slight upward pressure if demand picks up. Beyond that, national forecasts show small declines in average home prices this year, followed by gains in 2026 and 2027.

Meanwhile, recent activity hints at cautious optimism. In June, GTA home sales rose to a five-month high, although prices continued to fall—down 0.9 per cent from the previous month and 5.5 per cent year-over-year. In July, sales surged again by 13 per cent compared to June, marking the strongest July since 2021. Prices edged lower by another 0.2 per cent, bringing the annual decline to 5.4 per cent. This suggests buyers are returning as affordability improves, even though prices remain under pressure.

What lies ahead depends on factors like borrowing costs and economic stability. If the Bank of Canada cuts interest rates further, that could boost buyer demand. Economists note that without more policy support, prices may stay weak in Ontario through the rest of 2025. On the other hand, easing rates and renewed confidence could lead to a modest rebound.

For now, the GTA housing market sits in a cautious middle ground. Prices have dropped, giving buyers an edge. The next few months will be critical, as affordability improves, sales pick up, and economic conditions and interest rates will shape whether prices continue to slide—or begin to turn upward.