Toronto Real Estate Market Report — Q4 2025

Q4 2025 at a Glance

Residential Market Trends

Toronto's residential market closed 2025 on an upswing, buoyed by successive Bank of Canada rate cuts that brought the overnight rate down to 3.25% by December. The average selling price across all home types in the GTA reached $1,128,400 in Q4 2025, representing a 3.4% increase from the same period in 2024.

Detached homes continued to outperform, with the average price climbing to $1,502,600 — a 4.7% year-over-year gain. The strongest performance was seen in the 416 area code, where limited supply and high demand pushed detached prices up 5.2%. Semi-detached homes averaged $1,084,300 (+3.1% YoY), while townhomes came in at $892,500 (+2.8% YoY).

Total sales volume reached 18,740 units in Q4, up 8.2% from Q3 2025 and up 11.5% compared to the relatively subdued Q4 2024. The sales-to-new-listings ratio stood at 54.6%, indicating a balanced-to-seller's market overall, though conditions varied significantly by neighbourhood and price segment.

Days on market fell to an average of 22 days, down from 25 days in Q4 2024, reflecting increased buyer urgency as borrowing costs declined. Multiple-offer situations returned in popular inner-city neighbourhoods, particularly in the $800,000 to $1,200,000 price range that attracts move-up buyers and young families.

Condo Market Analysis

The condominium segment — which had been under pressure throughout much of 2024 and early 2025 due to elevated inventory levels and investor sell-offs — showed meaningful signs of stabilization in Q4 2025. The average condo price in the City of Toronto was $714,200, essentially flat year-over-year (+0.3%), marking the first quarter without a year-over-year decline since Q2 2024.

Active condo listings decreased by 12% compared to Q3 2025 as inventory was gradually absorbed. The months of inventory metric fell to 3.8 months from a peak of 5.1 months in Q2 2025, moving closer to balanced territory. New condo completions remained elevated with approximately 8,200 units delivered in the quarter, though pre-construction starts declined sharply — down roughly 35% from 2024 levels — which should help reduce future supply pressure.

One-bedroom condos (under 600 sq ft) continued to face the most resistance from buyers, while two-bedroom units with functional layouts and dedicated office space saw stronger demand. The rental market remained tight, keeping investor sentiment cautiously optimistic despite earlier concerns about carrying costs.

Commercial & Industrial Real Estate

Toronto's commercial real estate market presented a mixed picture in Q4 2025. Office vacancy in the downtown core remained elevated at approximately 14.8%, though this represented a slight improvement from the 15.3% recorded in Q3. Class A office space in prime locations fared better, with vacancy closer to 10% as companies continued to consolidate into premium buildings with modern amenities.

The industrial sector remained the standout performer. GTA industrial vacancy held at a remarkably low 1.2%, and average net rents for industrial space reached $18.50 per square foot — a record high. Demand from logistics, e-commerce fulfillment, and advanced manufacturing continued to outpace available supply, particularly in sought-after corridors along the 401 and 407 highways.

Retail real estate showed selective strength, with neighbourhood-level retail strips and grocery-anchored plazas outperforming enclosed malls. Average retail vacancy in the GTA was approximately 5.4%, with net absorption positive for the third consecutive quarter.

Key Takeaways

Outlook for 2026

Looking ahead, the Toronto real estate market is positioned for continued moderate recovery in 2026. The Bank of Canada is widely expected to implement further rate reductions, with the overnight rate projected to reach 2.75% by mid-year. Lower borrowing costs should support increased buyer activity, particularly among first-time buyers who were sidelined during the rate-hike cycle.

We anticipate average home prices across the GTA to rise in the range of 3% to 5% over the course of 2026, with detached homes and townhomes likely to lead appreciation. The condo market is expected to see modest gains of 1% to 3% as excess inventory continues to be absorbed and pre-construction starts remain subdued.

Key risks to this outlook include a potential economic slowdown, changes to immigration policy that could affect population growth, and the impact of evolving trade relations on business confidence. On the upside, pent-up demand from buyers who paused during the high-rate environment represents a significant tailwind for sales activity.

For sellers, early-to-mid 2026 presents a favourable window as lower rates draw buyers back while inventory remains relatively constrained. Buyers should act decisively on well-priced properties, as competition is expected to intensify as the year progresses.