Canada's housing market closed 2025 with a sense of transition and optimism.
Softer sales were offset by stronger affordability that signals a probable momentum for recovery ahead. National activity held firm near four-year highs even amid some dips during the year. The Greater Toronto Area (GTA) saw some steep adjustments from an increase in listings and easing prices. With interest rates settling down and pent-up demand making its presence felt, 2026 offers encouraging prospects for buyers and sellers across Canada.
December 2025 National Trends
December saw balance across the national real estate landscape following bursts of earlier demand. National sales in November declined 0.6% month-over-month and 10.7% year-over-year - average prices went down about 2% to roughly $682,000.
The MLS® Home Price Index softened 3.7% annually. However, inventory growth supported a near-balanced 52.7% sales-to-new-listings ratio, signalling steady progress. Full-year sales landed around 473,000 units (a modest pullback from 2024), while housing starts surged 9.4% to 254,058 units.
On the whole, the trends highlighted the resilience of the market plus renewed optimism as affordability improved after prolonged high-rate pressures.
GTA and Toronto Market Close-Up
The GTA's story paralleled national softening, and buyers enjoyed valuable leverage in late 2025. TRREB data showed December sales at 3,697, down 8.9% year-over-year, compared to 5,299 new listings that rose 1.8%.
Average prices went down 5.1% to $1,006,735, with the MLS® HPI dropping 6.3%; annual GTA sales totalled 62,433 (a 11.2% decline), at an average of $1,067,968, down 4.7%.
In the City of Toronto, averages stood at $1,069,807, down 8.2% year-over-year, with benchmarks at $941,800. Prices softened across categories: detached homes averaged $1.36 million after a 7.3% drop, semi-detached hit $1.03 million, down 6.7%, freehold townhouses reached $935,000, off 7.2%, and condo apartments landed at $660,000, following a 4.9% decline.
Sales across these property types have dipped year-over-year, from 9.0% for detached to 9.5% for condos, yet monthly upticks hinted at budding confidence.
2025 Year Review
Nationally, the year 2025 opened cautiously with high rates, gained traction with mid-year sales peaks, and settled down into normalization as listings increased and prices steadied.
Inventory levels provided welcome breathing room after some pretty intense periods.
GTA trends echoed this pattern with more pronounced supply-driven adjustments.
Broader factors like economic shifts, softer labour markets, and selective buyer behaviour contributed, but the hero of the story was the Bank of Canada’s rate cuts. As the 5-year variables settled near 3.54%, there was a marked boost in affordability, especially for first-time entrants.
2026 National Forecast
Looking forward to 2026, CREA projects national sales rising toward 556,000 units with prices climbing 3.3% to about $746,000, fueled by unleashed demand and slightly easing inventory. Housing starts should see modest gains from supportive policies like extended amortizations. While risks such as tariffs or employment fluctuations remain, consistent job growth and lower rates are expected to tilt toward positive momentum, particularly for single-family homes as the condo markets firm up.
GTA and Toronto 2026 Outlook
The GTA brims with recovery potential, expecting sales growth of 5-10% as buyer confidence rebounds.
Average prices could ease another 3-4.5% initially to around $1.02-1.07 million before stabilizing and turning upward. Suburbs may attract families to detached properties, while Toronto condos recover steadily amid urban appeal.
In its latest report, TRREB highlights pent-up demand shifting markets toward balance, with slower new construction eventually tightening supply. This scenario, supported by affordability gains and rate stability, positions the GTA for meaningful advances.
Seizing the Transition to Growth
2025 was a showcase of adaptability - balanced national dynamics, GTA affordability breakthroughs, and a solid foundation for expansion.
Looking ahead, as lower rates bring back sidelined buyers, 2026 promises uplifting activity from coast to coast, with the GTA's energy leading regional highlights.
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