Market Update - Oct. 2025

Dear Friends,

September’s interest rate cut was welcome news for homebuyers. With lower borrowing costs, more buyers were able to afford the monthly mortgage payments on a home that met their needs. The result was that 5,592 homes sold in the GTA, up by 8.5 per cent compared to September 2024 at an average price of $1,059,377. This now brings the YTD average price to $1,077,602, down 3.8% from the start of the year. It’s obvious now that the 20-30% price drop that some people were expecting or perhaps hoping for will not occur and as borrowing costs continue to drop, more buyers will enter the market, and the increased competition will start prices rising again.

Two major factors have impacted the real estate market, high interest rates and the tariffs. Interest rates are now at reasonable rates, but buyers are nervous about the impact tariffs will have on them. Increased home purchases continue to stimulate the economy through housing-related spin-off spending, and that stronger economy will help to offset the impact of ongoing trade challenges. Once Canadians feel more confident, home sales will start increasing to previous numbers.

The average list to sale price in the GTA last month was 98%, proving that pricing a home at the right price, today’s market value, results in a sale very close to the asking price. Many sellers try to hold out for an unrealistic price, hoping that they will find a buyer who is not aware of the current market value. If that does occur, let me assure you the mortgage appraiser will tell them they overpaid and they will not get the mortgage they need, and the sale would be nullified.

The way to succeed in today’s market is to realize that great opportunities to upgrade your home exist in certain markets and that you cannot take advantage of those opportunities until you sell your property. If prices increase by 10% then a $1,000,000 property increases by $100,000 and a $2,000,000 property increases by $200,000. It’s a great time to upgrade your home!

On September 17th, the Bank of Canada decreased the policy rate by 25 basis points, putting the current rate at 2.50%. A few factors leading to this include the weakened labour market, the sluggish housing sector, and softer core inflation. Although the forces driving the decrease aren’t great news, the result is a welcome change for any soon-to-be home buyers or those needing to renew an existing mortgage.  

Still have some lingering questions about this rate drop? Hopefully this helps:

Q: I’m thinking of buying a property but not sure if the timing is right.

A: This is a two-part answer. First, timing the market is never something I recommend. You can’t be sure where the top or bottom is and waiting usually either makes the home prices increase or the mortgage rates increase – so just buy when you’re able! Second, let’s get you a rate hold. You’ll have 90+ days to get all the documents in order, see what else happens with the last two rate announcements of 2025, and there’s no cost or commitment involved.

Q: What else can we expect in 2025?

A: There are several more data points to be released before year end, including labour force numbers, CPI rates, CREA stats and GDP figures. These numbers could result in another 25-point drop, but it’s unlikely to see anything lower than an overnight rate of 2.25%. Equally as likely is no further changes until 2026. But keep in mind the US trade war, as until it’s resolved, it could influence the Canadian economy in significant ways.

Q: How will the lower rate impact the housing market overall?

A: Lower rates might encourage developers to restart some paused projects, but the US trade situation might outweigh this new incentive. It may also spur new purchase activity from those who’ve been waiting on the sidelines since spring when we last saw a rate drop. Ideally, the general idea is that it will stimulate the housing market.