This week, the provincial government proposed to rebate the full eight per cent provincial portion of the HST for first-time buyers on new homes valued up to $1 million. 

The province’s proposal, which will be included in the 2025 Fall Economic Statement, would save first-time home buyers up to $80,000 off the cost of a new home when combined with existing provincial relief.

While homes valued up to $1 million would qualify for the full rebate, there will be partial rebates on a phased-in basis for homes valued up to $1.5 million. 

Combined with the federal government’s proposed removal of its five per cent portion of the HST, first-time buyers could save a further $50,000.

In a statement, Ontario Real Estate Association (OREA) president Cathy Polan called the plan a “step in the right direction for the future of this province.”

She said this type of action “is exactly what we need to help young Ontarians and their families get a foot on the homeownership ladder.”

‘A drop in the bucket’

Evan Malach, a Toronto Realtor with Harvey Kalles Real Estate, specializes in working with first-time buyers, and says he sees the struggles people face as they pinch every penny to break into the market.

Malach says he welcomes action from political leaders to address the housing crunch, but does he think this new rebate would make a meaningful difference?

“In one sense, yes, and in another, it’s a drop in the bucket,” he told Real Estate Magazine. “It depends on where you’re looking.”

He sees some potential for the rebate to boost new condo sales, a market that’s at its lowest level in decades.  

“I think it remains to be seen how much this (rebate) will actually make any kind of difference. I think it’s a start, but there’s a lot more that could and should be done.”

Interest rates still hitting hard

Carl Gomez, chief economist and head of market analytics at CoStar, said he thinks the rebate could have a marginal impact, but not enough to make a big difference in overall affordability. 

“I don’t think it’s a silver bullet, per se,” he said.

He said in the metro regions, there is low inventory for homes under $1 million, except for small condos. 

“There is not that much supply out there for first-time buyers to open up the door,” he said. “But, it is a step.”

He said financing is a major part of the equation for first-time buyers, and mortgage rates are still a barrier.

“Your traditional five-year mortgage rate is still relatively high compared to where it was pre-pandemic,” he said, adding that rates are contributing to worse affordability conditions today than the historical average. 

While the Bank of Canada cut the key interest rate on Wednesday to 2.25 per cent, Gomez pointed out that the five-year Government of Canada bond yield, which is what fixed rates are based on, actually went up. 

“On the rate relief side, it’s still tough for those first-time buyers,” he said. “The borrowing environment is still the biggest factor that’s causing first-time buyers, and even investors, to wait on the sidelines.”

Courtney Zwicker

Courtney Zwicker is a digital reporter and associate editor for REM. Based in Atlantic Canada, she has over a decade of experience covering daily business news.

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The Re/Max Housing Market Drivers Report released this week examines nine major Canadian urban centres over 30 years, with triple-digit price appreciation reported from 1994 to 2024. The report found population growth, along with policy levers and market events, have long been pillars of the Canadian housing market, creating periods of extended growth and contractions in the country’s largest cities. 

Halifax Regional Municipality reported the greatest increase in price percentage growth, rising 460 per cent for a compounded annual growth rate of 5.91 per cent. The Greater Toronto Area was a close second, with a percentage increase of 436.2 per cent and a CAGR of 5.76 per cent, while Saskatoon rounded out the top three, with a percentage increase of 377 per cent and a compounded annual rate of return of 5.35 per cent.

Re/Max Canada president Don Kottick said each generation has faced its challenges and obstacles. 

“Today’s trade barriers, high interest rates and stringent lending policies may be overwhelming, but this too shall pass,” he said. “Historically, dynamics evolve from recovery to expansion, peak to contraction, trough to recovery. Cyclically, the trough is short and gives way to renewed growth. In retrospect, buyers may look back and realize that this period represented the best opportunity in recent years to get into the market at a reduced price point.”

Market conditions are softening, but new buyers still struggle

Re/Max brokers are reporting balanced/moderating conditions in most markets, with affordability being an ongoing issue, despite more favourable conditions, including rising inventory levels. 

Average price escalation continues to outpace wage growth, making it exceedingly difficult for first-time buyers across all regions to enter the market, according to the report. Additionally, many would-be purchasers are challenged by the mortgage stress test, debt burdens, downpayment requirements and high carrying costs. 

A chronic supply shortage at lower price points is driving values higher for entry-level homes, while the cancellation of new construction projects has set the stage for tight market conditions in the future, according to Re/Max. 

The report also points to a notable trend: empty-nesters and retirees now competing with first-time buyers for smaller homes, particularly bungalows, in many areas of the country, making it even tougher to break into the market.

Unlocking opportunities to ease the path to ownership

Re/Max included a list of 10 potential solutions to put homeownership back in reach for more Canadians. They are:

• Allow potential homebuyers to withdraw more than the allotted amount in the first-time Home Buyers’ Plan from their RRSPs and from their TFSAs.
• Remove the additional two per cent requirement to qualify on the mortgage stress test.
• Extend amortization periods for first-time homebuyers.
• Remove Land Transfer Taxes on purchases under certain price points (to be determined by average price in each market).
• Remove GST and HST for all homebuyers on new housing product.
• Reduce or remove red tape, outdated zoning bylaws and restructure land-use policies, while speeding up the permit and approvals process.
• Incentivize the building of homes that meet the needs of today’s homebuyers, shifting focus to end users over investors.
• Policies and programs should prioritize first-time purchasers.
• Invest in and support innovations such as modular or prefab construction techniques that bring supply online faster and at a lower cost.
• Address supply of affordable homes as a percentage of available product or new construction.

“Affordability, population growth and supply shortages are the recurring themes shaping residential housing in Canada,” said Kottick. “While each market exhibits local nuances – Vancouver’s looming condo shortage, Edmonton’s affordability and Halifax’s steep climb in values are just a few examples – the shared pressures unite all major regions. Governments and private-sector players share a great responsibility in shaping Canada’s real estate landscape, addressing the housing crisis and ensuring sustainable urban development.”

Courtney Zwicker

Courtney Zwicker is a digital reporter and associate editor for REM. Based in Atlantic Canada, she has over a decade of experience covering daily business news.

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The following is a joint statement released on Oct. 27 by members of Ontario’s housing sector, including the Toronto Regional Real Estate Board (TRREB) and Ontario Real Estate Association (OREA).

Ontario is facing a housing emergency. Projects are stalling, builders are cancelling developments and families and individuals are being priced out of the market.

As the provincial and federal governments prepare to release their fall economic statement and budget respectively, our message is urgent: bold, coordinated action is needed to boost housing construction, lower costs and bring affordability back within reach for residents.

Housing is more than just shelter; it’s the foundation of our economy and the heart of our communities. Today, Ontario’s housing sector, from builders, Realtors, business groups, trade associations, not-for-profit organizations and rental providers, speaks with one clear voice. Together with governments at all levels, we must move swiftly to unlock housing supply, cut costs, and restore affordability by accelerating ownership and rental housing delivery.

We acknowledge the positive work done so far by the federal, provincial and municipal governments regarding policy developments, zoning reform and funding programs to encourage more housing construction, including the most recent provincial housing bill, Fighting Delays, Building Faster Act, 2025, which signals the government’s intention to take further practical steps in cutting red tape, lowering construction costs and restoring confidence and investment in the rental housing market by speeding up slow resolution processes to adjudicate landlord and tenant disputes. Other efforts include the Housing Accelerator Fund, the Apartment Construction Loan Program, Build Canada Homes, the Building Ontario Fund, the Municipal Housing Infrastructure Program, reform to end exclusionary zoning and allow as-of-right construction of multi-plexes on single lots and the Building Faster Fund, among other projects. However, more action is still needed.

We also recognize that potential disruptions impacting the housing ecosystem that are outside the direct control of governments and industry, such as trade wars, geopolitical tensions and economic uncertainty, need to be considered as we navigate an uncertain environment at the macro level. 

Housing remains the backbone of Canada’s economy. It supports over 1.2 million jobs and contributes more than $143 billion in economic activity yearly to Canada’s Gross Domestic Product (GDP). However, rising costs, difficult regulatory environments, economic uncertainty and constrained supply have slowed new housing starts and home purchases, putting tens of thousands of skilled trade jobs at risk. This will impact spin-off economic activity in related sectors and push both home ownership and rental housing further out of reach for many residents.

To meet Ontario and Canada’s housing challenge, a united focus on delivery is required. By reducing construction costs, attracting investments and aligning tax policy, zoning and approval systems, governments at all levels can restore confidence, protect jobs and support innovation at the speed and scale Canadians urgently need.

Policy priorities for immediate action

To restore affordability and confidence in the housing market, we are calling on municipal, provincial and federal governments to work collaboratively with the housing sector by adopting the following measures:

1. Position and profile housing as an economic driver: To ensure housing policy is economic policy, recognize housing construction and trade as a core driver of employment and GDP, adopt a framework to preserve the tremendous job creation that the housing industry generates, and acknowledge that housing unaffordability is also affecting our overall economic productivity, especially in the Greater Toronto Hamilton Area (GTHA).

2. Modernize outdated tax rules: Extend the GST/HST exemption on new homes up to $1.5 million for homebuyers, reflecting current market realities, particularly in major urban centres, and encouraging new construction.

3. Cut costs for homebuyers: Align cost recovery with actual service delivery and housing goals to reduce barriers to construction and costs to homebuyers. Municipalities and provinces need to collaborate with industry to modernize the fee structure applied to new housing, which is currently inflating housing costs and constraining new supply.

4. Build faster through innovation in parallel to traditional building: Support the advent, inclusion and expansion of modern construction methods – including panelized systems, modular building, robotics and other emerging technologies that embrace productivity, reduce costs and construction time, and enable homebuilding at scale. These need to be supported by an innovation policy framework created in partnership with the industry that provides incentives for early adopters and customers of new solutions, as well as investments in Canadian companies providing new solutions. Scaling up pioneering methods should be done in addition to supporting the ongoing innovation and productivity of traditional construction techniques.

5. Free up land and end exclusionary zoning: Act decisively to end outdated zoning restrictions to permit gentle density and a wider mix of housing types, especially missing-middle and multi-unit dwellings in more communities.

6. Incentivize private capital: Encourage programs that incentivize private capital, both investment and philanthropic, for both rental and ownership housing to accelerate market and non-market construction. This should include reintroducing the Multiple Unit Residential Building (MURBS) tax incentive.

The housing sector stands ready to partner with every level of government. Together, we can reignite momentum, rebuild confidence, restore affordability through partnership, innovation and investment, and deliver the homes our communities urgently need.

Signed:

John DiMichele, CEO, Toronto Regional Real Estate Board

Luigi Favaro, CEO, Ontario Real Estate Association

Ene Underwood, CEO, Habitat for Humanity GTA

Michael Brooks, CEO, Real Property Association of Canada

George Carras, CEO, R-LABS Canada

Jonathan Nusbaum, CEO, Terra Modular

Marlon Bray, executive vice president, Clark Construction Management

Tony Irwin, president and CEO, Federation of Rental-housing Providers of Ontario/Rental Housing Canada

Daryl Chong, president and CEO, Greater Toronto Apartment Association

Dave Wilkes, president and CEO, Building Industry and Land Development Association

Kathy Hogeveen, chief of operations, Assembly Corp.

Jude Tersigni, vice president of planning and development, Menkes Developments

Richard Lyall, president, Residential Construction Council of Ontario

Roselle Martino, executive vice president, policy and strategic affairs, Toronto Region Board of Trade

Frank Cairo, co-founder and CEO, Caivan Communities

Nhung Nguyen, CEO, Horizon Legacy

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However, the bulk of the affordability gains appear to be “rearview mirror,” according to a new report by RBC assistant chief economist Robert Hogue. 

“Further advancement becomes more challenging once interest rates reach a stable plateau as it depends exclusively on home price movements and household income trends,” reads the report. “Substantial price declines or robust increasing income would be necessary to drive more meaningful gains.”

Hogue anticipates broadly stable pricing across Canada over the next two years, with some regional variations and moderate wage increases. 

Purchasing power threatened

Worsening labour market conditions are beginning to weigh on household finances, undermining a key source of support for homebuyers, reads the report. Slowing wage growth threatens to erode purchasing power just as housing markets in several regions show tentative signs of stabilizing.

Over the past 18 months, stronger household incomes have been instrumental in improving affordability. Rising earnings account for more than one-third of the recent drop in RBC’s national aggregate affordability measure, signaling improved conditions for buyers. This offset the impact of stubbornly high prices and elevated borrowing costs.

That buffer is now fading, according to Hogue. Employment has weakened, and with it the pace of income growth. 

Ontario markets appear especially vulnerable. The province’s jobless rate has climbed well above pre-pandemic levels, ranking among the highest in Canada. Compounding the challenge, the ongoing trade war continues to pressure Ontario’s manufacturing base, with ripple effects across related sectors and service industries.

The report says Vancouver has the worst affordability conditions in the country.

“Property transactions remain suppressed despite modest summer gains, underscoring persistent affordability burdens. More declines in value are expected with elevated inventory and supply and demand conditions favouring buyers.”

Meanwhile, affordability has improved substantially in Calgary, where construction is robust and new supply and sky-high inventory levels are giving buyers lots of options.

Poor affordability and weakening job prospects weigh heavily on the Toronto market, challenging buyers and sellers, reads the report. Ownership cost pressures have eased noticeably in the past year, particularly for condominiums, “but the progress is not enough to fully unlock pent-up demand,” it says.

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Announced on Monday, the call for action follows a resolution passed by the Union of BC Municipalities (UBCM). The motion, brought forward by the North Central Local Government Association, urges the province to create a standing body that brings together:

• local governments
• Indigenous housing organizations
• market and non-market housing groups
• academic experts
• provincial and federal housing officials

The goal is to support collaborative, evidence-based housing policy that reflects the needs of communities across the province, advocates say.

The B.C. Real Estate Association is supporting the initiative, along with a growing list of stakeholders that includes municipalities, chambers of commerce and sector organizations such as the Aboriginal Housing Management Association, Canadian Mortgage Brokers Association – B.C., LandlordBC and the Manufactured Home Park Owners Alliance of B.C.

The resolution comes as Christine Boyle takes over as B.C.’s Minister of Housing and Municipal Affairs. Advocates say her appointment is an opportunity to move quickly on coordinated housing policy.

“This resolution represents a major step forward in creating inclusive and effective housing policy,” said Jasroop Gosal, BCREA’s manager of government relations. “We look forward to working with the new housing minister and all stakeholders to ensure this roundtable delivers real results for British Columbians.”

The resolution is now awaiting a formal response from the provincial government.

Current policy lacks collaboration: BCREA

In a brief on the housing roundtable, BCREA notes that the B.C. government has been under “significant pressure” in recent years to react quickly and introduce new measures to address the affordability crisis. 

“While many of the new policy ideas have had merit, the policy development process has lacked advance, detailed consultation with a variety of housing experts, which is necessary to ensure a holistic view is adopted,” it reads.

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Sales clocked in at 5,211, slightly higher than last year, but on a seasonally adjusted basis, it was the first monthly decline since March. Prices remain under pressure: the benchmark fell to $978,100, continuing a nine-month streak without gains. More importantly, the mix of which products are falling hardest is surprising even to seasoned observers.

Detached homes and condos lead the decline

Conventional wisdom said 416 detached homes would prove more resilient than condos. Instead, they have posted one of the steepest drops of this cycle, down more than 10 per cent year over year, the largest decline in the core and among freehold properties. The only segment that fared worse was 905 condominiums, which fell 10.6 per cent annually. These are not marginal adjustments; they are some of the deepest corrections seen in recent memory.

Other product types were not spared either. Average prices are down across nearly every category, with one exception: 416 townhouses, up about one per cent. For investors and builders, that small uptick hints at a potential redevelopment angle. Townhouse-style multiplexes on detached lots could pencil in more favorably if the spread between detached and townhouse values persists. But that is more of a niche silver lining than a broad market trend.

Inventory surge reshapes market power

The biggest story is not just about falling prices, but also about swelling supply. Active listings surged 22.4 per cent compared to last August, one of the largest year-over-year increases on record. Only May 2025’s 41.5 per cent spike rivaled it.

And the momentum is not slowing. Active listings historically rise in September, and early tracking suggests another record could be set. Last year, inventory jumped five per cent from August to September. With 2025 already running 20 to 40 per cent higher year over year, a comparable gain would push Toronto into uncharted territory for supply:

This imbalance is shifting the balance of power. With more options, buyers can demand price cuts. Sellers who resist price discovery face longer wait times. The average days on market rose from 29 to 33, with properties now typically taking more than a month, sometimes two, to sell.

Sales are up for the wrong reasons

TRREB and bullish analysts may point out that sales are higher than last year. But the data reveal why: more people are transacting because prices are falling, not because confidence or fundamentals have improved. In July, sales briefly outpaced new listings, hinting at demand catching up. But in August, that reversed. New listings jumped 9.4 per cent while sales crept up only 2.3 per cent. Supply growth is once again outpacing demand growth, a hallmark of deepening buyer’s market conditions.

The broader policy dilemma

The Bank of Canada faces pressure to restart rate cuts this fall. Monetary easing might pull sidelined buyers back in, but without structural affordability through higher wages and more attainable supply, it risks reigniting speculative churn. Lower rates cannot solve a market defined by abundance without affordability.

Meanwhile, TRREB has called for infrastructure spending to support growth. That is the more durable fix: aligning housing with incomes, transit, and services. Otherwise, the market risks bouncing between boom and bust on the back of credit cycles.

What this means for buyers and builders

For buyers, today’s environment is one of rare leverage. Longer days on market and swelling inventory mean bidding wars are evaporating, replaced by opportunities to negotiate. The risk is not missing out, but over-reaching, especially if prices continue to slide into the fall.

For builders, the era of assuming perpetual scarcity is over. Projects premised on constrained supply may underperform. The developers best positioned will be those who deliver family-sized units, rentals, and mixed-income communities, products resilient to speculative cycles.

A market that mirrors the economy

The GTA housing market has always been a proxy for the broader economy. Today’s weakness coincides with slowing exports in Ontario’s steel and automotive industries, pressured by U.S. tariffs. Housing, once the locomotive of economic recovery, cannot be counted on alone this time.

Whether the market stabilizes or continues correcting will hinge less on interest rates and more on structural alignment: matching supply to incomes, inventory to demand, and housing policy to the realities of the twenty-first-century economy.

Daniel Foch

Daniel Foch is the Chief Real Estate Officer at Valery.ca, and Host of Canada’s #1 real estate podcast. As co-founder of The Habistat, the onboard data science platform for TRREB & Proptx, he helped the real estate industry to become more transparent, using real-time housing market data to inform decision making for key stakeholders. With over 15 years of experience in the real estate industry, Daniel has advised a broad spectrum of real estate market participants, from 3 levels of government to some of Canada’s largest developers.

Daniel is a trusted voice in the Canadian real estate market, regularly contributing to media outlets such as The Wall Street Journal, CBC, Bloomberg, and The Globe and Mail. His expertise and balanced insights have earned him a dedicated audience of over 100,000 real estate investors across multiple social media platforms, where he shares primary research and market analysis.

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SingleKey’s analysis highlights mounting affordability challenges:

• The national average rent is $2,200 per month. Highest in Vancouver ($3,095) and Toronto ($2,899). Lowest in Montreal ($1,520).
• Income pressures: Renters nationally spend 37.6 per cent of income on housing, nearing the “crisis” threshold of 40 per cent. Toronto renters already exceed it at 41.1 per cent.
• Average renter income: $112,450, ranging from $91,779 in Montreal to $148,579 in Toronto.

The figures show a two-tier market: gateway cities like Toronto and Vancouver with high-income, high-credit renters; more affordable regions such as Quebec and Atlantic Canada; and Calgary in the middle with moderate rents and incomes.

Credit realities for renters

Despite financial strain, renters maintain strong credit scores. The national average is 694, above the 680 mortgage threshold.

• Toronto (729) and Vancouver (730) lead.
• Alberta has the lowest provincial average (681).
• B.C. (704) and Ontario (700) top provincial rankings.

Equifax also found non-mortgage holders were nearly twice as likely to miss payments as homeowners, underscoring renters’ vulnerability.

Delinquency rates steady, but financial gap widens

According to a separate report from Equifax released this week, close to 1.4 million Canadians missed a credit payment in the second quarter of 2025 — 7,000 fewer than last quarter – but still 118,000 more than a year ago. 

“While the overall delinquency rate appears to be leveling off, the underlying story is far more complex,” said Rebecca Oakes, vice-president of advanced analytics at Equifax Canada. “We continue to see a growing divide between mortgage and non-mortgage consumers — and continued financial strain among younger Canadians, who are facing a slower job market and rising costs.”

In the second quarter, consumers without mortgages were nearly twice as likely to miss a credit payment as those with mortgages (one in 19 versus one in 37). The gap has widened since 2019, when non-mortgage holders’ delinquency rate was about 45 per cent higher; it now stands at more than 96 per cent.

Total consumer debt climbed to $2.58 trillion in Q2, up 3.1 per cent year-over-year. Average non-mortgage debt rose to $22,147 as households contend with rising costs for vehicles, groceries, mortgages and rent. Credit card spending has started to dip, with inflation-adjusted spending per consumer down 0.4 per cent to $2,100 in June. Mortgage holders cut back, while non-mortgage holders saw a slight increase.

Trends emerge within cities, provinces

Regional patterns highlight further pressures. Ontario’s non-mortgage delinquency rate rose to 1.75 per cent, well above the national average, with the steepest increases in Toronto, Hamilton and surrounding regions. Alberta’s delinquency rate reached 1.98 per cent, also above the national level, with Edmonton, Fort McMurray and Calgary all posting higher-than-average increases. Rising unemployment and interprovincial migration have added strain.

Mortgage delinquencies remain elevated in Ontario and B.C., though growth has slowed. Ontario’s 90-day mortgage delinquency rate rose to 0.27 per cent in Q2, while B.C.’s hit 0.19 per cent. Other regions remain below pre-pandemic levels.

Building financial resilience

The expanded SingleKey–Equifax partnership will allow rent payments to be factored into credit histories and offer newcomers a faster way to establish records in Canada.

In a joint statement, the companies said the tools are intended to help renters strengthen their credit profiles while giving landlords clearer insights into tenant applications.

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Canada Mortgage and Housing Corp. (CMHC) reported that the annual pace of housing starts rose four per cent compared with June, reaching a seasonally adjusted annual rate of 294,085 units, up from 283,523.

Urban centres with populations of 10,000 or more accounted for an annual rate of 273,618 units, an increase of five per cent from June’s 261,171. Rural housing starts were estimated at 20,467 units. 

On an actual basis, housing starts in July for larger centres totaled 23,464 units, up four per cent from 22,610 in July 2024.

The six-month moving average of overall housing starts, a key indicator that smooths out monthly volatility, rose to 263,088 units, marking a 3.7 per cent increase from June. 

This sustained pace suggests builders remain active despite ongoing affordability challenges, higher financing costs, and tariff uncertainty.

“Through the first seven months of the year, actual housing starts have remained above 2024 levels, primarily driven by increased multi-unit starts in the Prairie provinces and Québec,” said Tania Bourassa-Ochoa, CMHC’s deputy chief economist.

“These persistently elevated national results are reflective of investment decisions made months or even years ago, highlighting the influence of previous market conditions and builder sentiment on current construction trends.”

Potential buyers still cautious, says CHBA CEO

Kevin Lee, CEO of the Canadian Homebuilders’ Association, said the trade war with the U.S. has had a chilling impact on homebuying demand. 

“The U.S. tariffs on Canadian goods mostly affect prices of construction materials in the U.S., rather than Canada, but CHBA’s second-quarter Housing Market Index (HMI) suggests that the economic uncertainty surrounding U.S. tariffs and possible Canadian counter tariffs is keeping buyers on the sidelines and holding back sales, resulting in slower housing starts,” Lee told Real Estate Magazine. “This is further increasing Canada’s housing supply deficit, while dampened sales and construction activity are also causing hardship in some regions for industry and workers, especially in Ontario and British Columbia.”

Lee said CHBA has recommended that the federal government avoid retaliatory tariffs on construction goods to “avoid inflating home-building costs in an already difficult environment.”

“Further, to both reduce the effects of U.S. tariffs and support Canada’s residential construction industry, the federal government can bring the cost of other aspects of construction down, principally the GST, working with provinces to have municipalities lower development charges, stopping increasing the cost of construction through code changes, and continuing to eliminate interprovincial trade barriers, among other housing supply and affordability actions, which will support more housing supply and stronger economic growth.”

‘Crisis of confidence’

Carl Gomez, CoStar Group chief economist, said the latest tariff hike to 35 per cent from 30 per cent on Canadian imports will have minimal impact on the economy because the vast majority of goods are protected under the Canada-United States-Mexico Agreement (CUSMA).

Similarly to Lee, he said the biggest impact the tariffs are having on the homebuilding sector is on consumer sentiment. 

“The home building industry is dealing with a crisis of confidence from its main customers,” he said. “The geopolitical risks that are coming from trade wars, how that’s affecting the psyche of homebuyers, is the biggest factor there. Obviously, a lot of folks today are showing no appetite to make a big purchase like real estate.”

And as a result, he said, many home builders are now suffering with “excess or bloated inventories,” especially when it comes to condos.

“A lot of developers need those pre-sales to get moving on projects, and before all of this, even with slightly higher interest rates and then the interest rates coming down, the pre-sales were still starting to fall off a cliff,” said Gomez. “So they’re sitting on unrealized value there, and that’s a problem.”

Courtney Zwicker

Courtney Zwicker is a digital reporter and associate editor for REM. Based in Atlantic Canada, she has over a decade of experience covering daily business news.

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Don’t miss out—join us online for REM’s monthly market breakdown on Aug. 26 at 2 PM ET. REM, columnist Daniel Foch will analyze CREA’s latest stats, regional variations and what shifting sentiment means for Realtors—register here.

The headlines are loud again. Home sales are up double digits. Buyers are back. Market is heating up. But if you’re reading that and assuming we’ve returned to boom times in the Greater Toronto Area housing market, take a step back and squint a little. The numbers tell a different story. And in this business, it’s the fine print, not the front page, that tells you where things are headed.

Yes, sales are up. But from where?

A low tide makes for easy gains

The Toronto Regional Real Estate Board (TRREB) July 2025 report touts a 10.9 per cent year-over-year increase in sales. That’s true. But let’s not pretend this is a return to 2021. We’re comparing this year’s performance to a brutally slow July in 2024. Gains from a low base can feel impressive on paper but are thin when stretched across the market’s broader context.

Prices are still down. Inventory is piling up. And homes are taking longer to sell. Those aren’t hallmarks of a market in full swing, but signals of a fragile rebound struggling to find its footing.

Prices down, affordability up… for now

The average home price in the GTA sits at $1,051,719, down 5.5 per cent from last July. Detached homes are down 5.1 per cent, condos down a staggering 9.3 per cent. These certainly aren’t rounding errors. They’re meaningful corrections.

But here’s where it gets interesting: as prices fall, affordability improves, at least on the surface. And this shift has attracted interest from buyers who may have been sidelined during the market’s peak. That’s part of why sales are ticking upward. People aren’t chasing the market. They’re entering it because it finally came back to them.

However, affordability is a slippery word in this environment. Rates haven’t meaningfully dropped. Mortgage qualification is still tight. And for every buyer who enters, there’s another household staying on the sidelines, unsure if this is truly the bottom.

Supply outpacing demand

The stat I’m watching closely? Active listings are up 26.2 per cent year-over-year. That’s massive. There are now over 30,000 homes on the market across the GTA, more than we’ve seen in several years.

Meanwhile, new listings rose by only 5.7 per cent year-over-year (lesser than June’s uptick). So where’s the jump in active inventory coming from? It’s not new supply. It’s old supply that’s sitting longer. And that points to a demand-side problem.

Homes aren’t moving like they used to (recall 2021). The average time a home sits on market (LDOM) has jumped by 25 per cent year-over-year. Properties are lingering. The majority of buyers are still hesitant.

Condo carnage and suburban softness

If you’re holding a pre-construction condo right now, you don’t need a market report to tell you what’s happening. You’re feeling it in your inbox: assignment listings, price drops, incentives. The condo market is taking the brunt of the correction.

Condos in the 905 area saw prices drop over 10 per cent. Even in the core, where demand tends to be more resilient, prices slipped nearly 9 per cent. That’s a sharp fall for a segment that once promised endless investor upside.

Townhouses and semis, long regarded as middle-market staples, saw year-over-year price drops of 7.4 per cent and 2.3 per cent, respectively. Detached homes, down 5.4 per cent, landed squarely between the two.

What we’re seeing is a broad-based softness, not a sector-specific slump. Every major home type is feeling the chill.

A market without momentum

The problem isn’t that buyers don’t want to buy. It’s that the market lacks conviction. There’s no urgency. When rates were low and prices were climbing, hesitation was costly. Today, waiting is rewarded.

That shift in psychology is powerful. It rewires the market’s metabolism. Buyers negotiate harder. Sellers reduce expectations. And the entire transaction cycle drags out.

In markets like these, volume can rise, just as it did in July, but that volume is often more reactive than proactive. It’s opportunistic. Buyers are bottom fishing.

So, is this the bottom?

Maybe. But bottoms in real estate are rarely sharp, and they almost never announce themselves. More often, they flatten out like a tired breath. What July gave us was a market trying to stabilize, not one bursting back to life.

The real momentum will come when two things align:

1. Interest rates ease meaningfully, unlocking credit and restoring confidence.
2. Sellers recalibrate expectations to match what buyers can actually afford.

Until then, we’ll keep seeing this kind of sideways movement. A little more volume. A little less price. A few more listings. A few more delays.

It’s not a crash. It’s not a boom. It’s a slow digestion.

Policy smoke and mirrors

TRREB’s commentary on the foreign buyer ban is worth noting. While many Canadians believe foreign investment is locked out, that’s not entirely true. Exemptions exist for multi-unit properties, development land, and rural housing.

But let’s be clear: foreign buyers aren’t driving this market and their absence isn’t what’s causing the slowdown. Domestic affordability, debt levels, and rate sensitivity are doing that all on their own.

Blaming or praising foreign policy tweaks won’t change the fundamentals.

Clarity in the noise

This market isn’t easy to read. The data gives us mixed signals. The headlines bounce between optimism and doom. But when you strip away the noise, one thing becomes clear:

We’re in the hangover phase.

The excesses of 2021 and 2022 are still being worked out. Some households are over-leveraged. Others are still underhoused. Prices have corrected, but the economic backdrop remains uncertain, especially with the Canadian economy “treading water” as TRREB puts it.

This isn’t a market to fear. But it’s not one to chase either. It’s a time to observe, to act selectively, and to resist the spin.

Final word

Don’t mistake a flicker for a flame. July gave us a pulse, not a comeback. If you’re in the market, buying, selling or advising, your edge right now is in understanding nuance. Look past the headlines. Study the inventory. Watch the clock.

And above all, stay disciplined.

The market rewards patience. Always has.

Daniel Foch

Daniel Foch is the Chief Real Estate Officer at Valery.ca, and Host of Canada’s #1 real estate podcast. As co-founder of The Habistat, the onboard data science platform for TRREB & Proptx, he helped the real estate industry to become more transparent, using real-time housing market data to inform decision making for key stakeholders. With over 15 years of experience in the real estate industry, Daniel has advised a broad spectrum of real estate market participants, from 3 levels of government to some of Canada’s largest developers.

Daniel is a trusted voice in the Canadian real estate market, regularly contributing to media outlets such as The Wall Street Journal, CBC, Bloomberg, and The Globe and Mail. His expertise and balanced insights have earned him a dedicated audience of over 100,000 real estate investors across multiple social media platforms, where he shares primary research and market analysis.

The post Why rising sales don’t mean Toronto real estate is back: Foch appeared first on REM.

The findings, based on survey responses and administrative records, offer insight into the condition, rent, and vacancy of nearly 593,000 subsidized housing units across all provinces and territories from 2019 to 2024.

The findings largely focus on housing in major urban centres. Toronto alone accounts for nearly 30 per cent of the surveyed units, while Vancouver, Ottawa and Montreal collectively make up another 17 per cent.

Nationally, the vacancy rate increased from 1.6 per cent in 2019 to 2.9 per cent in 2024. Most provinces increased at a similar rate, except for Manitoba, which saw its overall vacancy rate increase from 1.2 per cent to 13.7 per cent during this same period.

Proportion of units in poor condition increasing

Among all surveyed units, 43.5 per cent are rated in good-to-excellent condition, while 19 per cent were rated in average condition. 

Just over one-third fall into the fair-to-poor category, with 23 per cent of those deemed poor – an increase from 2.5 per cent 2019.

This happened mainly because fewer units were rated as being in “good” or “fair” condition, reads the report.

At the same time, the number of structures expected to have no repairs within the next five years has declined from 34 per cent to 23 per cent.

Building conditions varied significantly across regions. For example, in Saskatchewan only 15 of social and affordable housing units were rated as excellent or good, compared to 60-70 per cent in British Columbia and Quebec.

Buildings built since 2003 are more likely to be in good or excellent condition, with 77 per cent of them in that category. By contrast, only 38 per cent of units built before 2003 are rated similarly.

The age of the stock of social and affordable units varied significantly by province and territory. In Quebec and the three territories, more than one-third of the stock was built after 2003. In contrast, in Ontario, the Prairies and the Atlantic provinces, 65 per cent to 90 per cent of stock was built before 1987.

Prices soar for most unit types

Between 2019 and 2024, national average rents increased by approximately 16 per cent for one-bedroom units and 22 per cent for 2-bedroom units. Average rents increased by 30 per cent for units with three or more bedrooms. 

Average rents declined by four per cent for bachelor units.

How are units managed?

More than half of the social and affordable housing units in the most recent survey were managed by various levels of government, accounting for 53 per cent of the total.

Non-profit organizations oversaw the management of 26 per cent of units, while housing cooperatives were responsible for another seven per cent.

The remaining 17 per cent were managed by private companies or through partnerships that involved a combination of government, non-profit, and private actors. 

When it comes to funding, government entities were also the primary contributors.

The post Rents climbing, condition worsening for affordable housing: CMHC appeared first on REM.