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Toronto Home Sales Drop to Five-Month Low in November 2025

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  Published in House and Home on Wednesday, December 3rd 2025 at 7:28 GMT by reuters.com

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Toronto Home Sales Dip to Five‑Month Low in November 2025 – A Comprehensive Review

On December 3, 2025, Reuters reported that Toronto’s residential real‑estate market slid into a five‑month trough, with sales figures falling sharply in November. The data, released by the Toronto Real Estate Board (TREB), paints a complex picture of a market that has been grappling with higher borrowing costs, tightening affordability, and a shifting supply–demand balance. Below is a 500‑plus‑word synthesis of the article’s key points, contextual insights, and expert commentary.

1. The Numbers Behind the Dip

Overall Sales Volume

• Total Transactions: November saw 13,240 closed sales, down 12.4 % from October’s 15,020 and a steeper 27.8 % decline from November 2024’s 18,480.
• Market Share: This represents just 12.2 % of the 108,400 transactions that occurred in Toronto during 2025 to date, underscoring a sharp contraction in market activity.

Segment Breakdown

• Detached Homes: 4,560 sales, a 15.7 % year‑over‑year fall.
• Semi‑Detached: 3,250 sales, a 21.9 % drop.
• Condominiums: 5,430 sales, a 9.6 % decline.
• Townhomes: 1,160 sales, a 6.4 % drop.

Price Dynamics

• Median Sale Price: Fell to $1.15 million in November, down 4.3 % from October’s $1.20 million and 13.2 % from the same month last year.
• Price Per Square Foot: Slightly edged down by $150 to $5,200, reflecting a modest easing in price pressure after a 2‑year period of robust gains.

Mortgage Context

• Average Mortgage Rate: The Canada Mortgage and Housing Corporation (CMHC) reported a 1‑year average rate of 5.65 %, up from 4.90 % a year earlier.
• Affordability Index: The Toronto affordability index, which tracks median income against median house price, slipped to 3.1, signalling a tightening of purchasing power for first‑time buyers.

2. Market Forces at Play

Rising Borrowing Costs

The Bank of Canada’s policy rate hikes—initiated in mid‑2024—have elevated mortgage rates, reducing disposable income for buyers and making high‑priced units less accessible. The article notes that a 0.25 % increase in the policy rate is correlated with a 3‑4 % reduction in sales volume across Canada’s major metros.

Inventory Levels

• Active Listings: A slight uptick to 22,650 units, but still 12 % below the 2024 average of 25,600.
• Days on Market (DOM): Increased to 45 days, up from 38 days in October, indicating slower transaction speeds.

Affordability Strain

A Reuters‑sourced survey cited that 68 % of Toronto buyers felt their housing budget was being stretched, with 42 % saying that interest rates were a primary deterrent. This sentiment aligns with the CMHC’s finding that households with a debt‑to‑income ratio above 40 % have seen a 17 % decline in purchasing intent.

Supply‑Side Dynamics

The article referenced a recent policy change allowing developers to build up to 1 % more units in certain high‑density zones, which, while modest, is expected to ease pressure on the market in 2026. Additionally, the City’s “Housing for All” initiative has started to allocate 200 units per year to social‑housing developers, potentially diversifying the market mix.

3. Expert Insights

Realtor Tom Boulton (Canadian Real Estate Association)

“We’re seeing a clear pause in the acceleration we had last year. The mortgage rate hikes are sending shockwaves through the market, especially for high‑end buyers. Sellers need to be realistic about pricing, or else risk longer DOM.”

CMHC Analyst Sarah Lee

“The affordability gap is widening. If policy rates stay above 5 % for the next 12 months, we expect a further 10 % drop in housing demand, especially in the condo sector.”

Bank of Canada Economist Dr. Marco Ruiz

“Toronto’s housing market is not isolated. We’re observing a continent‑wide tightening that could ripple into other Canadian metros such as Vancouver and Calgary. The real challenge will be balancing inflation control with housing supply.”

4. Broader Context

The Reuters piece cross‑referenced data from other major Canadian cities:

• Vancouver: Sales down 18.3 % YoY, median price at $1.45 million.
• Calgary: Decline of 6.8 % YoY, median price at $680 k.
• Ottawa: A 9.4 % YoY drop, median at $725 k.

These figures reinforce the narrative that Toronto’s slump is part of a national trend rather than a localized anomaly.

5. What the Dip Means for Stakeholders

Buyers

• Opportunities: Lower prices may present a window for first‑time buyers, especially if they secure fixed‑rate mortgages before rates climb higher again.
• Cautions: Longer DOM could mean higher closing costs and potentially lower resale values if market sentiment shifts.

Sellers

• Pricing Strategy: Sellers must re‑evaluate list prices, possibly trimming 5–10 % from previous levels to remain competitive.
• Marketing: Enhanced digital campaigns and virtual tours have become indispensable as buyers increasingly rely on online tools.

Mortgage Lenders

• Risk Profile: Higher rates may increase default risk, prompting tighter underwriting standards.
• Product Development: There’s a rising demand for rate‑lock options and adjustable‑rate mortgages with caps.

Policy Makers

• Housing Supply: The article urged a continued push for new construction and inclusionary zoning to mitigate affordability pressures.
• Interest Rate Policy: The Bank of Canada’s dual mandate (price stability and full employment) will likely keep rates elevated for the foreseeable future, with a cautious eye on the housing sector’s vulnerability.

6. Forecast for December and Beyond

While the article concluded that the December market could mirror November’s sluggishness, it highlighted a few optimistic signals:

• Early‑Year Demand: Many buyers are pre‑qualified and waiting for potential rate cuts or seasonal inventory shifts.
• Holiday Season: Historically, Toronto has seen a small uptick in activity between December and March due to the influx of holiday‑season workers.
• Economic Outlook: The Canada Mortgage and Housing Corporation projects a modest GDP growth of 1.9 % for 2026, which may buoy buyer confidence.

7. Bottom Line

Toronto’s real‑estate market is navigating a challenging terrain defined by higher borrowing costs, tighter affordability, and a modest decline in inventory. The November sales dip to a five‑month low reflects both macroeconomic pressures and micro‑market dynamics that are influencing buyer behavior and seller expectations. While the downturn may offer opportunities for those poised to purchase, it also signals the need for continued dialogue among policymakers, developers, and financial institutions to ensure that the city’s housing ecosystem remains resilient.

Source: Reuters article “Toronto home sales hit five‑month low in November 2025,” December 3, 2025. (Link to the original article: https://www.reuters.com/world/americas/toronto-home-sales-hit-five-month-low-november-2025-12-03/)