Toronto real estate market August 2025: trends, rates, and development updates

Seventy Seven Park
3 days ago
5 min read

City skyline with a lush green park in the foreground. Baseball diamond and walking paths are visible. Toronto real estate market August 2025

Real Estate: Momentum & Balance in the GTA July 2025 sales volumes.

The Toronto Regional Real Estate Board’s latest figures show that July was the GTA’s strongest month since 2021. 6,100 properties changed hands – a 10.9 % increase from July 2024 – with sales up 13 % on a seasonally adjusted month‑over‑month basis. The average selling price slipped 5.5 % year‑over‑year to $1,051,719 and the composite benchmark price was down 5.4 %. New listings (17,613) were 5.7 % higher than a year earlier, while active listings surged 26 % to 30,215. Semi‑detached homes led the recovery with a 25.5 % jump in sales, followed by detached houses (+11.3 %) and townhomes (+7.9 %), while condo sales edged up 5.8 %.

What’s driving the shift?

Market watchers note that many buyers paused in spring because of economic uncertainty and trade‑related headlines. Improved affordability, slightly lower borrowing costs and growing inventory encouraged hesitant buyers to act. TRREB’s president acknowledged that more relief is still needed on borrowing costs, but noted that households are finding affordable options.

However, the Bank of Canada’s July 30 policy announcement kept the overnight rate at 2.75 % and warned that tariffs and trade uncertainty could affect future growth. As a result, the fall market may be muted; some sellers who didn’t achieve their desired prices in spring plan to re‑list, adding to supplys.

Implications for Buyers and Sellers: Toronto real estate market August 2025

Segment	Key numbers	Take‑away
Buyer’s market	Sales‑to‑new‑listings ratio ~34.7 % in the GTA (34.6 % in the City of Toronto) – well below the 40 % threshold for a balanced market.	Buyers have leverage. A growing supply of listings and days‑on‑market (~30‑35 days) provide time for due diligence and negotiation. Focusing on properties with strong fundamentals is essential because well‑priced homes still attract competition.
Pricing pressure	Average price down 5.5 % YOY;the condo segment faces the most significant downward pressure as inventory builds.	Sellers must be precise with pricing and invest in presentation (staging, professional photos). Overpricing is the quickest path to stale listings.
Inventory outlook	New listings up 5.7 % and active listings up 26 %.	Expect a flood of re‑listings this fall from sellers who failed to sell during summer. Strategic positioning will be vital to stand out.

Seventy Seven Park’s fall forecast.

After analyzing the Toronto real estate market in August 2025, we anticipate continued downward pressure on prices through the fall as inventory builds. Rate cuts are possible later this year; if the Bank of Canada begins easing, buyer sentiment could improve, but a balanced market will still require realistic pricing and proactive strategies.

Mortgages & Financing: Renewals under the Microscope

Policy rate status. On July 30, the Bank of Canada held its policy rate at 2.75 %, leaving the bank rate at 3 %. Officials cautioned that trade‑driven uncertainty is tempering growth and underlying inflation remains sticky, so the governing council is assessing whether further cuts are warranted. The next rate decision is scheduled for September 17, 2025.

Mortgage renewals will drive household budgets. A July 2025 Bank of Canada staff note estimates that about 60 % of all mortgages in Canada will renew in 2025 or 2026.

Based on market‑implied rate expectations and assuming borrowers renew into similar products, the analysis concludes:

Roughly 60 % of renewing borrowers will see payment increases. Most hold five‑year fixed‑rate mortgages.
Average monthly payments could rise 10 % for mortgages renewing in 2025 and 6 % for those renewing in 2026.
Borrowers with five‑year fixed contracts renewing in 2025 or 2026 could face payment hikes of 15–20 %.
In contrast, borrowers with variable‑rate mortgages and variable payments might see payment declines of 5–7 %.
Approximately one‑quarter of borrowers are expected to experience payment decreases, largely those with short‑term fixed‑rate mortgages.

The Bank notes that extending amortization or tapping home equity lines of credit could help many households manage higher payments, and some borrowers have already repaid more principal than required.

Financing Outlook and Strategies

Lock in rates early. With policy rates on hold and potential cuts later in the year, now is an opportune time to secure a mortgage pre‑approval. Pre‑approvals protect you if rates rise and demonstrate financial readiness to sellers.
Consider shorter fixed terms. Given market expectations for declining rates after 2025, a shorter fixed‑term mortgage could allow you to benefit from future cuts when you renew.
Stress‑test your budget. Incorporate a hypothetical rate increase when calculating affordability. Even if cuts materialize, being prepared for higher payments helps ensure long‑term stability.

Blog post banner on Toronto's negative equity mortgage shows suburban homes. Text: "What to do when you owe more than your home is worth." | Toronto real estate market August 2025

Development & Housing: Investing in Care Infrastructure

While much media focus remains on market statistics, there have been meaningful development announcements that will affect supply and community infrastructure:

Expansion of long‑term care capacity. In late July 2025, Ontario announced construction funding top‑ups for two long‑term care homes in Barrie. The Grove Park Home for Senior Citizens is upgrading 62 existing beds and adding two new beds (total 145). The Village of Innis Landing project will redevelop the Coleman Care Centre and add 80 beds, bringing the home to 192 beds. The projects are part of the province’s plan to build 58,000 new and upgraded long‑term care beds. Upgrades will include improved fire detection and suppression systems, mechanical lifts in resident rooms and community hub space ctvnews.ca. Government ministers noted that such investments will allow seniors to “age with dignity and the care they need”.

Why this matters for real estate investors: Long‑term care developments add to the broader housing ecosystem by freeing up existing residential supply. They also illustrate the province’s commitment to building and upgrading community infrastructure, which can stimulate construction employment and support regional economies. Investors should watch for similar public‑private partnerships and government incentives that could drive future development opportunities.

Key Takeaways

Market moving toward balance. Sales momentum improved in July, but inventory growth and falling prices indicate a shift toward a buyer’s market. Expect more re‑listings this fall, with the condo segment feeling the most pressure.
Rate cuts remain possible but aren’t guaranteed. The Bank of Canada held rates steady in July and is watching trade‑related headwinds. Mortgage rate movements will hinge on economic data and tariff developments.
Renewals will reshape household finances. A majority of mortgages renewing in 2025–26 will face payment increases of 10 % on average, underscoring the importance of budgeting and seeking professional advice early.
Development gains attention. Government‑backed long‑term care projects highlight an ongoing focus on housing supply and community services. Such initiatives may create pockets of local economic activity and improved housing options.

At Seventy Seven Park, our mission is to equip you with strategies that account for market data, financing trends and development initiatives. Whether you’re looking to buy, sell, invest or refinance, our team of mortgage brokers and real estate specialists can help you navigate the evolving landscape.

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