Buyers navigate market uncertainty as GTA home sales plunge

  5/29/2025 |   SHARE
Posted in Toronto Real Estate by Ranjeet Ubhi| Back to Main Blog Page

A more buyer-friendly market is emerging in Toronto amid plummeting home sales, slipping prices and a flood of inventory – but first-time buyers are still navigating plenty of uncertainty and making big mistakes to be avoided in the current environment, according to a prominent mortgage broker.

Licensed broker and LowestRates.ca expert Leah Zlatkin said three common missteps can undermine buyer confidence – starting with holding off on purchases as they hope for deeper rate cuts.

“When the pandemic hit, mortgage rates fell to record lows—with some fixed rates dipping below 2% and variable rates hovering around 1%,” Zlatkin said. “But those rates were driven by emergency policies, not typical market conditions. Today, fixed mortgage rates around 3.8% to 4.2% are still available for well-qualified borrowers, and many economists believe this could represent the bottom of the current rate cycle.”

Zlatkin warns that waiting could prove costly. “For buyers who wait, the risk isn’t just higher rates—it’s that renewed demand could drive home prices higher, offsetting any advantage from a slightly lower borrowing cost.”

Second, many first-time buyers underestimate ownership costs beyond mortgage payments. “Many first-time buyers overlook key costs like home insurance, utilities, regular upkeep—things like roof repairs, furnace replacement, landscaping—and even water heater rentals,” Zlatkin said. “Then, there are property taxes, which in Toronto are paid in six installments: three from the interim bill early in the year, and three from the final bill later on.”

Finally, Zlatkin emphasizes the importance of professional guidance. “A broker provides that crucial full-market view, helping buyers explore all options and make confident, informed decisions.”

The data reflects broader economic uncertainty, with Toronto’s unemployment rate at 8.4% in December 2024 and inflation at 2.3% in March 2025.

GTA market continues to see big cooldown

Home sales in the Greater Toronto Area (GTA) fell 23.3% in April compared to the same month last year, as potential buyers continue waiting for lower borrowing costs and economic certainty, according to data released by the Toronto Regional Real Estate Board (TRREB).

TRREB reported 5,601 home sales through its MLS system in April 2025, down from 7,302 sales in April 2024. The average selling price dropped 4.1% year-over-year to $1,107,463, while new listings increased 8.1% to 18,836.

“Following the recent federal election, many households across the GTA are closely monitoring the evolution of our trade relationship with the United States,” said TRREB president Elechia Barry-Sproule. “If this relationship moves in a positive direction, we could see an uptick in transactions driven by improved consumer confidence and a market that is both more affordable and better supplied.”

The market shift has created more favourable conditions for buyers, with inventory levels remaining historically elevated. The MLS Home Price Index Composite benchmark declined 5.4% year-over-year in April.

“Inventory levels remained elevated historically in April, pointing to substantial choice for households looking to purchase a home in the GTA,” said TRREB chief information officer Jason Mercer. “Buyers took advantage of this choice when negotiating purchase prices, which resulted in a lower average price across market segments compared to last year.”

Source: Canadian Mortgage Professional

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