TORONTO — Home sales in the Greater Toronto Area remained weak in May while inventory levels were up — giving more negotiating leverage to potential homebuyers.
The Toronto Regional Real Estate Board said in a release Wednesday that 6,244 homes were sold in May, down 13.3 per cent year-over-year.
Meanwhile, new listings reached 21,819 last month, up 14 per cent from last year.
"Home ownership costs are more affordable this year compared to last. Average selling prices are lower, and so too are borrowing costs," said Jason Mercer, TRREB’s chief information officer, in a release. "All else being equal, sales should be up relative to 2024."
But he said global trade disruptions tied to the United States’ tariff campaign has soured consumer confidence in the last few months, affecting home-buying decisions.
"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," Mercer said.
The housing market has been more fragmented, based on price point, said Cailey Heaps, CEO of the Heaps Estrin Real Estate Team in Toronto.
"There are segments of the market such as the first-time homebuyers market that's still very active because those buyers are motivated to get into the market because affordability is obviously much better right now," she said in an interview.
Heaps said lower housing prices from a year ago, combined with more options to choose from and lower borrowing costs have made the market "a perfect storm" to enter the housing market.
The Bank of Canada held its benchmark interest rate steady at 2.75 per cent for the second time in a row on Wednesday, though the key rate has come down from its height last year of five per cent.
Heaps suggested those who are looking to buy a home shouldn't try and time the market.
"I wouldn't hesitate to act thinking that pricing is going to go lower," she said. "In my opinion, I think the Toronto market will stay stable and is poised to rebound in the coming months."
Heaps said the market seems more balanced compared with the last three years.
"We're poised to rebound," she said. "I would say if it's not in 2025, it should be in the first half of 2026."
Seasonally adjusted, home sales increased 8.4 per cent from April to May.
National Bank economist Daren King said the trade situation with the U.S. continues to weigh on the real estate market.
"In this still volatile geopolitical context, it is too early to say that the slight pickup in sales in recent months is the beginning of a sustainable recovery for the Toronto residential market," he said in a note.
The average selling price decreased four per cent in May compared with a year earlier to $1,120,879, and the composite benchmark price, meant to represent the typical home, was down 4.5 per cent year-over-year.
Greater Toronto's home sales decline last month was in line with other Canadian urban markets, as the Vancouver region recorded an 18.5 per cent year-over-year drop in the number of residential properties that changed hands in May. Calgary, meanwhile, saw a 17 per cent decrease.
In the City of Toronto, there were 2,315 sales last month, a roughly 15 per cent decrease from May 2024. Throughout the rest of the GTA, home sales also fell, to 3,929.
The steepest decline was in the condo market, where 25.1 per cent fewer properties sold, followed by detached homes with 10.6 per cent fewer sales and townhouses recording a 9.8 per cent decrease.
This report by The Canadian Press was first published June 4, 2025.
Ritika Dubey, The Canadian Press
