Toronto’s housing market unlikely to boom anytime soon despite brighter July

Toronto’s housing market saw a July sales uptick, yet oversupply, falling prices, and upcoming mortgage renewals temper optimism for the months ahead.

InMortgage News, Market Insights
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Home sales rose in July: GTA recorded 6,100 sales, a 10.9% increase compared to July 2024.
Inventory increased too: Listings surged 5.7%, contributing to already elevated market supply.
Prices continued to drop: Across property types, prices fell—detached: –5.1%, semi‑detached: –2.3%, townhouses: –7.4%, condos: –9.3%.
No boom expected yet: Brokers remain skeptical about sustained recovery, pointing to sluggish absorption rates and rising inventory.

What’s Driving the Cautious Outlook?

Rising Inventory and Sluggish Absorption

While sales rose, the sales-to-new-listings ratio remains low, signaling low demand against growing supply. Inventory levels are among the highest seen in over two decades.

Upcoming “Renewal Cliff”

Many mortgages are maturing—especially those taken during 2020’s low-rate era. Homeowners may face significantly higher monthly payments, possibly leading to more sellers listing—and adding pressure to supply.

Persistent Price Declines

Each housing segment experienced notable price drops, especially condos and townhouses, which continue to see sharper year-over-year declines.

Rate Relief Not in Sight

Interest rates remain “stubbornly high.” Fixed rates linger in the low-to-mid 4% range, while variable rates are unchanged. The Bank of Canada, citing economic uncertainty, is unlikely to cut rates in its September meeting.

Real-World Examples & Context

Condo Shakeout: Condos—facing a 9.3% price drop—illustrate the chill in investor demand and prolonged oversupply.
Renewal Crisis: A homeowner with a 2020 mortgage could see monthly payments rise sharply, possibly forcing a sale if they can’t afford it.

Visual Summary

Snapshot — July 2025 vs. July 2024
• Sales: +10.9% → 6,100 homes sold
• Inventory: +5.7% → Continued oversupply
• Price changes:
  – Detached: ↓5.1%
  – Semi-detached: ↓2.3%
  – Townhouse: ↓7.4%
  – Condo: ↓9.3%
• Rates: Fixed ~4–4.5%, variable steady, no cuts expected

Key Takeaways

Insight	What It Means
Sales up, but cautious	A signal of buyer activity returning—but not enough to spark recovery.
High inventory persists	More homes are listed; competition stays high, keeping prices subdued.
Renewals ahead	Upcoming mortgage rate shocks may lead to forced listings or distress sales.
No rate relief yet	Buyers can’t count on cheaper mortgages in the near term.

Stay Informed

Toronto’s housing activity showed a glimmer of life in July, but structural headwinds—like elevated inventory, incoming renewals, and steady-rate policies—suggest that any bounce is likely temporary and fragile.

Would you like a deeper dive into condo-specific trends or market forecasts for the remainder of 2025? Just say the word!