June 2025 Market Outlook

The Greater Toronto Area (GTA) real estate market experienced a historic shift in May, with inventory levels reaching all-time highs and buyer activity remaining subdued. Here’s a concise breakdown of the latest trends and what they mean, especially for those considering

downsizing.

Historic Inventory Surge:

 Active listings surpassed 30,000 for the first time ever, finishing the month at 30,964.

 This represents:

o 13% increase from April

o 42% jump year-over-year

o 89% above the ten-year May average

 Inventory by property type:

o Condos: 10,523 active listings (120% above ten-year average)

o Detached Homes: 13,770 listings (65% above ten-year average)

o Townhomes: 2,287 listings (115% above ten-year average)

o Semi-Detached: 1,680 listings (new high-water mark)

Sales and Price Trends:

 Supply: Only 6,244 sales in May, translating to about five months of inventory—a clear sign of oversupply.

 Average GTA sale price: $1,120,879 (up 1% from April, but 3.84% below last year)

 Condos: $683,413 average price; sales 36% below historical norms

 Detached homes: $1,425,264 average price; sales up 17% month-over-month

 Townhomes: $995,662 average price; sales up 14% monthly

 Semi-detached: $1,098,447 average price; sales up 10% monthly

Federal Incentives for First-Time Buyers

 New government plan offers a full GST rebate on new homes up to $1 million for first-time buyers.

 Designed to ease entry into high-cost markets like Toronto and Vancouver.

 Expected to boost new construction sales, particularly for condos and townhomes within the $1 million cap.

Market Sentiment & Outlook

 Despite lower prices and borrowing costs, economic uncertainty is keeping buyers cautious.

 Jason Mercer (TRREB) notes that improved economic confidence and further rate cuts could unlock pent-up demand.

 For now, the market remains balanced or even buyer-favoured, with motivated buyers enjoying unprecedented negotiation power.

What Does This Mean for Downsizers?

Selling a Larger Home:

 More Competition: With record-high inventory, sellers of larger homes face increased competition. Detached home listings are up 65% from the ten-year average, so expect longer selling times and potentially more pressure to price competitively.

 Stable but Softer Prices: Detached home prices have ticked lower, and buyers are in the driver’s seat. Downsizers may need to adjust expectations about sale price and be prepared for more negotiation.\

Buying a Smaller Home:

 Unprecedented Choice: Condo and townhome inventory is at historic highs, giving downsizers more options than ever before.

 Negotiation Power: With subdued buyer demand and a glut of listings, downsizers can negotiate aggressively on their next purchase—whether that’s a condo, townhome, or semi-detached.

 Stable Entry Prices: Condo and townhome prices are holding steady or have dipped, making it easier to find affordable, lower-maintenance homes.

Timing and Strategy:

 Favourable Window: The current market is one of the most buyer-friendly in years, especially for those moving into smaller properties.

 Plan for Two Transactions: Downsizers should budget for the possibility that their larger home may take longer to sell, but can take advantage of buyer leverage when purchasing a smaller property.

 Monitor Incentives: While the new GST rebate targets first-time buyers, increased activity in the new home sector could eventually boost resale demand as well.

Bottom Line:

For GTA homeowners looking to downsize, the market offers a rare combination of abundant choice and strong negotiating power on the buy side. While selling a larger home may require patience and flexibility, the opportunities for securing a great deal on a smaller property have

rarely been better.