If you’re hoping to buy your first home this year, you’ve likely asked the question on every buyer’s mind: is it a buyer’s market in Toronto right now? After years of record-high prices and intense bidding wars, 2025 feels different. Open houses are quieter. Listings are sitting longer. And headlines suggest that conditions may finally be shifting in favour of buyers.
But is that really the case? And if so, what does it mean for first-time homebuyers trying to get a foothold in one of Canada’s most competitive real estate markets?
Let’s take a closer look at how Toronto’s market has evolved – and what first-time buyers should keep in mind before taking the leap.
What Does a Buyer’s Market In Toronto Actually Mean?
Before diving into the data, it’s worth understanding what people mean when they talk about a buyer’s market. In simple terms, it’s when there are more homes for sale than there are buyers actively looking to purchase. That imbalance gives buyers more choice and negotiating power. Homes tend to stay on the market longer, prices stabilize, and sellers often become more flexible with their terms.
For the last several years, Toronto has been on the opposite end of the spectrum – a seller’s market defined by fierce competition and homes selling within days, often well above asking. But markets are cyclical, and what we’re seeing in 2025 suggests the pendulum is starting to swing.
The State of Toronto’s Market in 2025
Over the past year, the pace of Toronto’s housing market has slowed noticeably. Inventory – the number of active listings available – has climbed steadily since late 2024, while sales volumes have cooled. According to recent reports, listings in the Greater Toronto Area were up more than 50% year over year this spring, yet actual home sales dropped by nearly a third.
That means buyers have far more options than they did even a year ago, and homes are taking longer to sell. Many properties that might have sparked bidding wars in 2021 or 2022 are now seeing price reductions or conditional offers. In several neighbourhoods, the sales-to-new-listings ratio – a key measure of market balance – has dipped below 40%, which economists typically classify as a buyer’s market.
This doesn’t mean Toronto’s market has crashed. Prices have softened in certain segments, particularly condos and higher-end homes, but detached family properties in established neighbourhoods still hold steady. Instead, it’s a sign of normalization: a cooling period after years of unsustainable growth.
What’s Driving This Shift
A few key factors are shaping this new landscape of developing a buyer’s market in Toronto. Rising borrowing costs remain one of the biggest influences. Although interest rates are expected to gradually ease through 2025, they’re still significantly higher than during the ultra-low-rate years that fueled the previous boom. That has reduced overall affordability and kept some would-be buyers on the sidelines.
At the same time, more homeowners who bought during the peak are now facing mortgage renewals at higher rates, prompting some to list their properties earlier than planned. Add in new construction completions and a slower pace of population growth compared to the post-pandemic rebound, and the result is a market with more supply than demand.
For first-time buyers, that’s not necessarily bad news. More listings mean more choice and fewer situations where you’re competing against ten other offers. Sellers are also becoming more open to negotiation – a welcome change from the take-it-or-leave-it attitude that defined much of the last decade.
Are Prices Actually Dropping?
The short answer is: not across the board. Toronto’s average home price remains high by national standards, hovering around the mid-$900,000 range as of early 2025. But that number hides the variation happening within different property types and neighbourhoods.
Condominiums, particularly in downtown neighbourhoods in Toronto like The Annex, have seen the steepest adjustments. Rising maintenance fees, softening investor demand, and an influx of new units have pushed prices down slightly. For those who are hoping for a buyer’s market in Toronto, that may translate into a chance to secure a well-located condo for less than they would have paid two or three years ago.
Freehold homes tell a different story. Detached and semi-detached houses in family-friendly areas like Danforth Village, Leslieville, and Little Italy remain in demand. While the pace of sales has slowed, many sellers in these neighbourhoods are financially stable and in no rush to drop their prices drastically.
Overall, 2025 feels less like a correction and more like a recalibration – a period where buyers and sellers are learning to meet in the middle again.
What This Means for First-Time Buyers
For first-time buyers, the shift toward a more balanced or a buyer’s market in Toronto brings both relief and responsibility. You may not have to fight through multiple offers anymore, but that doesn’t mean you should rush in unprepared.
Now is the time to revisit your finances with a clear-eyed view of your long-term goals. Higher interest rates mean smaller mortgage approvals, so it’s essential to know your budget before you start house hunting. Getting pre-approved helps you move quickly when you find the right property – and demonstrates to sellers that you’re serious.
Buyers today also have more room to negotiate, whether that means requesting home inspections, asking for minor repairs, or offering below the list price when justified by market data. Patience is your friend. Homes are no longer selling overnight, and waiting a few extra weeks to find the right fit can pay off in both price and peace of mind.
The biggest mistake new buyers make in a slower market is assuming they can “time” the bottom perfectly. Real estate rarely moves in a straight line. Instead of chasing the lowest price during a buyer’s market in Toronto, focus on finding a home that fits your lifestyle, meets your needs, and feels financially comfortable even if conditions shift again.
How to Read the Market Beyond the Headlines
Real estate headlines can be dramatic – one week proclaiming a buyer’s market in Toronto, the next calling for a rebound. The truth often lies somewhere in between. Markets differ not only by neighbourhood but also by property type, price point, and even the time of year.
For example, a two-bedroom condo downtown may see plenty of listings and modest price reductions, while a renovated detached home in a good school district could still sell quickly. Understanding these micro-markets helps you identify opportunities others might miss.
Working with a real estate professional who understands these local dynamics can make a huge difference. They can interpret market data, flag undervalued properties, and guide you on when to make a move versus when to hold back. Even when there’s a buyer’s market in Toronto, expertise and timing matter.
What Could Change Later in 2025
The biggest variable for the rest of the year will be interest rates. If the Bank of Canada continues to ease borrowing costs as inflation cools, more buyers may re-enter the market, reducing the advantage current buyers have. That means the window of extra leverage could narrow as competition returns.
Economic trends – from job growth to population shifts – will also play a role. Toronto remains one of the most desirable cities in Canada, and long-term demand isn’t disappearing. This current moment of opportunity might be exactly that: a moment.
For those who’ve been waiting for the market to cool, 2025 could represent a realistic path to homeownership with a buyer’s market in Toronto that felt out of reach just a few years ago.
Bringing It All Together
So, is it a buyer’s market in Toronto right now? In many ways, yes – particularly for first-time buyers who are patient, prepared, and ready to act strategically. Inventory is higher, sellers are more flexible, and competition has eased. But it’s not a uniform story. The best opportunities exist where informed buyers can recognize value and negotiate confidently.
If you’re considering buying your first home this year, now is the time to start preparing – not by guessing what the market will do next, but by understanding how it works today.
If you’re ready to explore the possibilities or want expert guidance on where to begin, get in touch with our team. We’ll help you navigate Toronto’s changing market and find a home that fits your goals – in 2025 and beyond.
Because even in a shifting market – or a buyer’s market in Toronto, the right move is always the one that feels like home.
