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October 03.2025

2 Minutes Read

Toronto Housing Market Booms After Rate Cut, But Prices Drop

Sold sign in Toronto housing market, traditional brick house.

Toronto Housing Market Sees Activity Amid Lower Prices

After a significant interest rate cut by the Bank of Canada in September, the Greater Toronto Area (GTA) witnessed a notable increase in home sales. Monthly reports from the Toronto Regional Real Estate Board (TRREB) indicate that September saw a jump of 8.5 percent in home sales, totaling 5,592 transactions compared to the same month last year. This uptick comes as buyers flock to take advantage of more manageable mortgage rates, leading to a more dynamic market.

Supply-Inspired Buyer Power Thrives

The market surge is not just driven by consumer interest; supply factors are prominently at play. New listings in the GTA increased to 19,260 in September, up by four percent year-over-year. With more choices available, buyers find themselves in a strong negotiating position, often able to push prices downward. This dynamic is reflected in the average selling price, which dropped by 4.7 percent from the previous year, settling at $1,059,377.

Context of the Housing Market Recovery

Following the rate reduction, homebuyers have reported increased affordability when considering monthly payments, a crucial factor in a market that has grappled with rising costs over the past couple of years. TRREB officials, including president Elechia Barry-Sproule, have highlighted the economic implications, asserting that increased home purchases can boost related spending, helping mitigate ongoing economic challenges. However, despite this optimistic bump in activity, total sales remain below historical averages when aligned with the number of households within the region.

Looking Ahead: Further Rate Cuts Needed?

While the September cut has sparked a revival in interest, industry experts emphasize the need for additional adjustments to truly invigorate the market. TRREB’s chief information officer Jason Mercer suggests that one to two more 25-basis-point cuts could align home loan rates more closely with household incomes, further encouraging homebuyers to take action.

What's Next for Toronto's Housing Landscape?

As the fall season progresses, both prospective buyers and current homeowners should stay abreast of how economic changes, including potential further rate cuts, might shape the market going forward. Understanding these developments could prove invaluable for anyone looking to make informed decisions in a currently evolving landscape.

Real Estate Market Trends

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Toronto Housing Market Booms After Rate Cut, But Prices Drop

Toronto Housing Market Sees Activity Amid Lower Prices

Supply-Inspired Buyer Power Thrives

Context of the Housing Market Recovery

Looking Ahead: Further Rate Cuts Needed?

What's Next for Toronto's Housing Landscape?

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