Toronto-area home prices will fall three per cent at the end of 2025 from last year as the region’s real estate continues to sputter, Royal LePage predicts.
“The market hasn’t taken off like everyone expected it to,” said Shawn Zigelstein, broker and leader of Team Zold, Royal LePage Your Community Realty.
Buyers aren’t rushing in. There’s a little less demand, which causes prices and sales to dip.
“And now we’ve got some increased inventory out there for buyers to have their choice,” he said.
In a report released Wednesday, the company lowered their forecast.
Back in the spring they predicted a slight increase in end-of-year prices, and in the summer revised that projection to prices remaining relatively flat by year’s end.
Buyers now hold the cards and they’re taking their time, said Zigelstein.
“A lot of it is still the fact of what’s going on down south, ” he said. There’s concern about jobs, investment portfolios, and an overall sense of a lack of stability.
“I think people are waiting … to see what happens with real estate.”
Three or four years ago, Toronto region buyers would have to make an offer on a home after seeing it once. Now they can go back for multiple showings, sleep on it, and even put in a condition for a home inspection, Zigelstein said.
Sales recovered a bit in September, he added, which is a good sign for the market.
“People need to be patient if you’re a seller, and if you’re a buyer, you’ve got great opportunity,” he added.
In the third quarter of 2025 the aggregate price of a home in the Greater Toronto Area (GTA) decreased 3.5 per cent to $1.15 million compared to the same period in 2024, the report stated.
The aggregate price of a home also dropped 3.5 per cent on a quarterly basis.
Aggregate prices are calculated using a weighted average of the median values of all housing type transactions collected in the region.
Just how far prices will fall is the million-dollar question.
“Buyers are still really holding out, a lot of them likely for the bottom to appear,” added Anne-Elise Cugliari Allegritti, vice-president of research and communications at Royal LePage.
Over the course of the year, inventory of homes for sale started to build up, and many move-up buyers are waiting to sell their homes before they purchase another one.
In a hotter market it’s the reverse, she said.
Part of what’s causing prices to dip is that buyers are in the driver’s seat, affordability has been improving, and interest rates are continuing to decline, Cugliari Allegritti added.
“There’s not a lot of urgency because that floor hasn’t appeared yet. We don’t think it’s far off,” she said.
But the reality is buyers aren’t feeling pressure like they did during the pandemic, when they would fear that a home would be worth $10,000 to $20,000 more the following week if they waited to make a deal, she said.
The median price of a single-family detached home dropped 1.2 per cent from 2024 to $1.4 million, and the median condo price dropped 7.4 per cent to about $669,000 in the third quarter of this year, according to Royal LePage.
Within the city of Toronto, the aggregate home price dropped 4.6 per cent year-over-year to $1.076 million in the third quarter of 2025 — the median price of a single-family detached home dropped 7.4 per cent and condo 5.6 per cent.
“The condo market is definitely dragging down prices overall,” said Cugliari Allegritti. Investors have “pulled back.”
While there are some deals to be found there, she’s hearing there’s a lack of larger units, particularly for first-time buyers, who are entering the market later in life and need room for a kid, a dog, or a home office.
“A 500-square-foot one-bedroom isn’t necessarily the most desirable first-time product,” she said.
Still, there’s a lot of product available, Cugliari Allegritti said.
It’s not necessarily a bad thing that buyers have this breathing room, she said, adding it could be good for the market in the long run.
Looming economic uncertainty due to the U.S. tariffs has shaken some potential buyers, she added.
Some of that is easing, but there’s a lag before this change in sentiment shows up in the market.
If this continues, she believes there will be “more of a boost” to the market in the spring, typically the busiest season for real estate.
Late last fall, Royal LePage’s president and CEO Phil Soper predicted that Toronto’s housing market would boom in 2025.
