The wait is over for Greater Toronto Area (GTA) homeowners and prospective buyers. The Toronto Regional Real Estate Board (TRREB) has officially released its Market Watch report for December 2025, and the results confirm what many had suspected: home prices have dropped as the market continues its significant rebalancing.
For those looking for affordable entry points into one of North America’s most expensive markets, the final data for 2025 offers a glimmer of hope. From a surge in inventory to a notable dip in average selling prices, the GTA housing landscape shifted gears in the final month of the year.
1. The December Breakdown: Prices and Sales on the Decline
The headline for December 2025 is the continued cooling of both sales volume and home values. According to TRREB, there were 3,697 home sales reported in December, an 8.9% decline compared to the same month in 2024.
More importantly for buyers, the average selling price in December 2025 was $1,006,735, representing a 5.1% drop from the $1,060,496 average recorded in December 2024
. This downward trend was also reflected in the MLS Home Price Index (HPI) Composite benchmark, which fell by 6.3% year-over-year.
Key December 2025 Stats at a Glance:
- Average Selling Price: $1,006,735 (Down 5.1% YoY).
- Total Sales: 3,697 (Down 8.9% YoY).
- New Listings: 5,299 (Up 1.8% YoY).
- Active Listings: 17,005 (A massive 17.5% increase from 2024).
2. 2025 Year-in-Review: A “Down” Year for Sales
Looking at the broader picture, 2025 was a challenging year for the GTA real estate market. Total calendar year sales amounted to 62,433 units, a sharp 11.2% decrease from the previous year.
This decline in sales coincided with a 10.1% increase in new listings throughout the year, reaching a total of 186,753. The result of lower demand and higher supply was a correction in annual prices. The annual average selling price for 2025 was $1,067,968, down by 4.7% from the 2024 average of $1,120,241.
3. Detached vs. Condos: Which Market is Dropping Fastest?
The price drops were not uniform across all housing types. Detached homes and condos, the two primary drivers of the GTA market, saw different levels of adjustment in December 2025.
Detached Homes
- Total GTA Average Price: $1,302,980 (Down 5.9% YoY).
- City of Toronto (416): Average price $1,498,079 (Down 4.5% YoY).
- Suburbs (905 Area): Average price $1,239,882 (Down 7.0% YoY).
Condo Apartments
- Total GTA Average Price: $628,029 (Down 7.3% YoY).
- City of Toronto (416): Average price $663,227 (Down 7.2% YoY).
- Suburbs (905 Area): Average price $555,110 (Down 9.5% YoY).
The data shows that the 905 area suburbs generally experienced sharper price declines than the City of Toronto, particularly in the condo sector.
4. The Power Shift: Why Buyers Now Have the Edge
One of the most telling indicators in the TRREB report is the Active Listings count. At the end of December 2025, there were 17,005 properties for sale across the GTA, a 17.5% surge compared to the 14,476 active listings at the end of 2024.
This surplus of inventory, combined with lower sales activity, has shifted the market into “buyer’s territory.” Homes are also taking longer to sell. The average Listing Days on Market (LDOM) rose to 41 days, a 13.9% increase from the previous year, while the Property Days on Market (PDOM) climbed to 65 days.
TRREB CEO John DiMichele noted that this elevated inventory is “allowing for selling prices to be negotiated downward, helping improve affordability“.
5. The Economic “Weight”: Rates and Employment
Why did the market cool so significantly in 2025? TRREB points to “economic uncertainty” as the primary weight on consumer confidence.
Despite the Bank of Canada Overnight Rate sitting at 2.3% in November 2025, mortgage rates remained relatively high for many consumers. TRREB reported that 5-year mortgage rates were averaging 6.09% as of November 2025.
Additionally, the Toronto Unemployment Rate was reported at 8.7% in October 2025. TRREB Chief Information Officer Jason Mercer emphasized that “GTA households must be confident in their employment situation before committing to long-term monthly mortgage payments“.
6. Looking Ahead: Is a Recovery Coming in 2026?
While 2025 ended on a downward note for prices, experts believe the groundwork for a recovery is being laid. TRREB President Daniel Steinfeld stated that improved affordability, driven by lower prices and trending lower mortgage rates—has set the market up for a rebound.
“Once households are convinced that the economy and labour market are on a solid footing, sales will increase as pent-up demand is satisfied,” Steinfeld remarked.
What this means for you:
- For Buyers: With average prices dipping below the $1.1M mark and inventory levels at a multi-year high, you have more negotiating power and selection than you’ve had in years.
- For Sellers: Patience is key. Homes are staying on the market for an average of over two months (65 days PDOM). Realistic pricing is essential to compete with the 17,005 other active listings.
Conclusion: A Market in Transition
The December numbers confirm that the Toronto real estate market is in a period of necessary rebalancing. With a 5.1% drop in average prices and an 8.9% decline in sales, the “frenzy” of previous years has officially cooled.
As we move into 2026, the focus will remain on the Bank of Canada and the employment market. If interest rates continue to stabilize and consumer confidence returns, the “pent-up demand” TRREB mentions could quickly turn the tide. For now, the numbers are in, and they clearly favor the patient, prepared buyer.
