May GTA home sales fall 13% despite improved affordability

The hot spring real estate market remains missing in action in the Greater Toronto Area, as home sales remain well below seasonal norms.

According to the Toronto Regional Real Estate Board (TRREB), a total of 6,244 properties traded hands over the course of the month, marking a -13.3% decrease from the same time frame in 2024. That’s also the lowest May for sales since 2002, reports the Toronto Star, not counting the anomaly of COVID-era May 2020.

However, on a monthly basis, there are early green shoots of demand– sales rose 11.4% compared to April activity, and the posted year-over-year decline came in smaller than the -23.3% seen last month.

The buyers who are active certainty had plenty to choose from; new listings continue to hit the market, with a total of 21,819 homes put up for sale in May, a 41.5% year-over-year increase, and also up 15.8% from April.

The number of active listings – all of the available homes for sale – also increased by 41.5% annually, with a total of 30,964 on the market by the end of May, 3,578 more than at the end of April. And as has been the trend this year, those homes are taking longer to sell, at an average of 39 days, compared to 27 in 2024.

As demand remains soft and inventory builds up, GTA home prices continue to fall; the average price in May came to $1,120,879, down 4% year over year. That follows the 4.1% drop recorded in April, though prices firmed up slightly (1.2%) on a monthly basis.

All things considered, improved affordability should be driving market demand, says TRREB’s Chief Information Officer Jason Mercer – but ongoing uncertainty from tariffs continues to dissuade buyers from making a move.

“Home ownership costs are more affordable this year compared to last. Average selling prices are lower, and so too are borrowing costs. All else being equal, sales should be up relative to 2024,” he states in TRREB’s May  press release. “The issue is a lack of economic confidence. Once households are convinced that trade stability with the United States will be established and/or real options to mitigate our reliance on the United States exist, home sales will pick up. Further cuts in borrowing costs would also be welcome news to homebuyers.”

Little rate relief expected

It’s not likely that lower Toronto mortgage rates are on the horizon; the Bank of Canada (BoC) opted to leave its trend setting overnight lending rate – which underpins variable mortgage rates – unchanged at 2.75% in its latest announcement on June 4. That means borrowing products based on the prime rate – including HELOCs and other types of loans – won’t see any interest rate changes.

Fixed mortgage rates have also been largely stagnant since mid-April, as both US and Canadian bond yields have remained elevated due to investor fatigue and higher inflation expectations.

While growing recession fears could prompt the BoC to cut its rate again in 2025 – currently, another 50 basis points, delivered in two cuts, is expected in the coming months – those same factors are what’s keeping buyers on the sidelines. After all, no one wants to make a big financial commitment if they’re worried about their future employment and ability to make their mortgage payments.

Condo sales plummet 25%

Source: Toronto Regional Real Estate Board

Year-over-year drops in home sales and prices were present across all home types in the GTA. As has been the long-term trend, the condo sector saw the largest decline, with just over a quarter (25.1%) fewer units selling during the month than in last May, with 1,482 transactions. Condo prices also dropped by 6.4%, to an average of $683,413.

Single-family detached house sales were down 10.6% year over year, though made up the most sales in terms of volume, with 2,998 sales, at an average price of $1,425,264, down 5.4% YoY. Townhouse sales saw the next largest decline, with sales down 9.8% at a total of 1,071 transactions, at an average price of $904,272 (-4.5%). Semi-detached houses were the only home type with fairly flat sales on an annual basis (down just 0.3%) with 617 homes sold, at an average price of $1,098,447 (-6.4%).

Sales declines spread across GTA

Source: Toronto Regional Real Estate Board

Sales have slumped across the GTA, with similar declines recorded both in the City of Toronto, as well as the surrounding “905”-area markets. In the city, transactions dropped by 14.4%, with a total of 2,315 homes sold. New listings ticked up by 6.6% compared to last year, with a total of 7,888 properties brought to market. Combined, that softened Toronto home prices by 2.8%, to an average of $1,155,616.

Sales were down to a slightly lesser degree outside of Toronto, with the 905 marketing a 12.6% year-over-year drop, with 3,929 transactions. However, there was a considerable surge of new listings, up 18.5% with 13,931 homes listed, which resulted in a 4.6% price decrease to an average of $1,100,412.

Also read:

• Bank of Canada holds target interest rate at 2.75% in June 2025 announcement
• April GTA home sales down 23% as buyers stick to the sidelines
• April Canadian home sale flat as buyers stick to the sidelines
• Lower home prices in April improved affordability in over half of Canada’s markets