Toronto Real Estate Market Shows Strong Recovery with 10.9% Sales Growth

The Greater Toronto Area (GTA) housing market delivered its strongest July performance since 2021, with home sales surging 10.9% year-over-year to reach 6,100 transactions in July 2025. This Toronto real estate market recovery signals improved market conditions driven by enhanced affordability and reduced borrowing costs.

Key GTA Housing Market Statistics July 2025

• Home sales volume: 6,100 transactions (up 10.9% from July 2024)

• Active MLS listings: 30,215 properties (26.2% increase year-over-year)

• Market inventory: 4.95 months of available homes

• Market trend: Moving toward sellers' market conditions

Toronto Home Prices and Affordability Improve

Lower home prices in Toronto combined with reduced borrowing costs have significantly improved housing affordability across the GTA. This enhanced affordability is enabling more households to access homeownership opportunities, contributing to the sustained sales growth.

The current inventory level of under five months indicates Toronto sellers market conditions are emerging, representing a notable shift from previous market dynamics.

Condo Market Toronto Shows Resilience

The Toronto condo market demonstrated steady performance with 1,576 sales in July 2025:

• 4.4% monthly increase from June 2025

• 6.3% growth compared to July 2024

• Condo prices down 9.4% year-over-year due to increased new construction deliveries

Economic Impact and Interest Rate Outlook

According to TRREB Chief Information Officer Jason Mercer, the Canadian housing market can serve as a catalyst for economic growth amid trade uncertainties with the United States. Further interest rate cuts could stimulate additional home sales and generate positive economic spillover effects, supporting job growth and regional economic development.

Market Tightening Indicates Balanced Conditions Ahead

With sales growth outpacing new listing increases, GTA market conditions are tightening. New listings rose modestly compared to June, while the sales-to-listings ratio improvement suggests the market is transitioning toward more balanced conditions.

Toronto Housing Market Forecast

The combination of improved affordability, steady sales growth, and tightening inventory levels positions the GTA real estate market for continued recovery through 2025. The housing sector's potential as an economic catalyst, supported by potential interest rate reductions, could drive further market strengthening.

About Anne Lok, Broker  B. Arch, M.AAD.

Anne is a Toronto-based realtor with an architectural background, specializing in design-forward properties in historically rich neighbourhoods. She offers a customized approach for each client, helping buyers find homes that blend timeless charm with modern functionality. Anne also guides sellers in showcasing the unique appeal of their properties and assists investors in identifying opportunities with strong potential for growth.

Contact Anne for a Buyer or Seller consultation.

Toronto’s housing market is expensive and competitive, but there’s one overlooked issue making affordability even worse—the missing middle. Between high-rise condos and million-dollar detached homes, there’s a serious lack of townhouses, duplexes, triplexes, and low-rise apartments.

With recent zoning changes and new developments, Toronto is finally taking steps to fix this problem. This blog explores why missing middle housing matters, the latest developments, pricing insights, and what this means for buyers and renters.

What is Missing Middle Housing?

The term “missing middle” refers to housing that sits between high-density condos and low-density single-family homes. These homes provide more space for families while remaining affordable for middle-income earners.

Cities like Toronto have historically focused on luxury condos and expensive detached homes, leading to fewer options for people who want spacious, reasonably priced housing in urban neighbourhoods.

Why is Toronto Struggling with the Missing Middle?

Several factors contribute to Toronto’s lack of medium-density housing:

• Zoning Restrictions – Historically, many Toronto neighbourhoods only allowed single-family homes, preventing duplexes, triplexes, and townhouses from being built.

• High Demand for Condos – Developers prioritized condos due to higher profit margins and demand from investors.

• Expensive Land & Construction Costs – Building medium-density homes is often less profitable compared to high-rise developments.

With Toronto’s population booming, residents are demanding more diverse housing options that better suit families and professionals.

Toronto’s Latest Missing Middle Housing Initiatives

1. Zoning Changes for Multiplexes

Toronto has recently legalized multiplexes in all neighbourhoods, allowing duplexes, triplexes, and fourplexes in areas that previously banned them. This change is expected to increase housing diversity and support affordability.

2. Beaches-East York Missing Middle Pilot Project

The city is launching a pilot project to demonstrate how missing middle housing can be built effectively on city-owned land. This initiative aims to set a precedent for future developments and encourage more builders to invest in mid-sized housing. Updates are posted on the City of Toronto website here.

3. Private Developer Investments

Tempus Capital Inc. and TUK Developments Inc. are investing $100 million to create spacious, family-friendly rental units. Their first project features three-bedroom apartments with 1,100 square feet of space, addressing the need for larger rental units in Toronto.

What’s the Price Range for Missing Middle Homes in Toronto?

Toronto’s missing middle homes are priced between condos and detached homes, offering a middle ground for buyers and renters.

Here’s a breakdown of current prices:

• Townhouses & Row Houses – Prices typically start around $800,000 in areas like Weston-Pelham Park, offering a more affordable step up from condos.

• Duplexes & Triplexes – These multi-unit homes can range from $900,000 to $1.5 million, depending on the neighbourhood and condition.

• Low-Rise Apartments – Rental units in new developments, such as those by Tempus Capital Inc. and TUK Developments, are designed for families and professionals, with three-bedroom units spanning 1,100 square feet.

As Toronto continues to promote medium-density housing, prices may fluctuate depending on zoning laws, interest rates, and construction costs.

Why Missing Middle Housing is Important?

Better Affordability

More housing options mean lower prices and better accessibility for buyers and renters. Townhouses, duplexes, and triplexes offer a compromise between space and cost, making them a great alternative to high-rise condos.

Improved Community Living

Unlike large condo towers, missing middle housing promotes walkable neighbourhoods with lower traffic congestion, more green space, and stronger local communities.

Environmental Benefits

Medium-density housing is more sustainable than single-family homes and reduces the city’s urban sprawl—a major issue affecting Toronto’s infrastructure.

What’s Next for Toronto?

The push for missing middle housing is gaining momentum, but challenges remain. While zoning changes and pilot projects are promising, developers and policymakers need to prioritize affordability and accessibility to make these homes widely available.

Will Toronto finally embrace medium-density housing? The coming years will determine whether these initiatives can reshape the housing market and offer better options for families and professionals.

About Anne Lok, Broker  B. Arch, M.AAD.

Anne is a Toronto-based realtor with an architectural background, specializing in design-forward properties in historically rich neighbourhoods. She offers a customized approach for each client, helping buyers find homes that blend timeless charm with modern functionality. Anne also guides sellers in showcasing the unique appeal of their properties and assists investors in identifying opportunities with strong potential for growth.

*All data provided by Urbanation

New Condo Sales Plunge 91% Below 10-Year Average

• Only 502 new condo units were sold in Q2-2025 across the Greater Toronto and Hamilton Area (GTHA), marking a 10% drop from Q1 and a 69% year-over-year decline.

• Q2 typically sees peak activity, but this year’s sales were 91% below the 10-year seasonal average—continuing a trend of 30-year lows.

• Resale condo transactions also fell 20% annually to 4,074 units, hitting a 17-year low (excluding COVID years) and landing 32% below the 10-year average.

Developers Halt Launches and Cancel Projects Amid Surging Resale Listings

• Only three new projects (891 units) launched for presale in Q2, while four projects (719 units) were cancelled.

• Since early 2024, 20 projects totaling 4,360 units have been cancelled, with nine now being converted to rentals—including three from Q2-2025.

• Resale listings hit a record 14,759 units in Q2, 35% above the 10-year average.

New Launches Struggle Despite Price Drops to $1,000 PSF

• Just 16% of newly launched units sold in Q2—far below the 10-year average of 50%.

• This sluggish performance came despite limited inventory and average opening prices falling to $1,003 PSF, the lowest since Q2-2020.

• Resale market activity also weakened, with a sales-to-listings ratio of 28%, half the 10-year average and the lowest Q2 level in three decades.

Developer Inventory Doubles, Resale Listings Hit Record High

• Total unsold inventory reached 24,045 units in Q2-2025, down 3% year-over-year—marking the first annual decline in over three years.

• However, 2,478 newly completed units remained unsold, a 102% increase from last year and five times higher than two years ago.

• Active resale listings ended Q2 at 8,998 units—double the 10-year average.

Prices Continue to Slide for Both New and Resale Condos

• New condo prices averaged $1,325 PSF in Q2, down 2% year-over-year and 7% over three years (excluding incentives).

• Resale prices dropped 8% annually to $797 PSF, with a three-year decline of 14%.

• The price gap between new and resale condos widened to a record 66%, more than double the spread from a decade ago.

Completions to Hit Record High in 2025, Then Plunge by 2027

• Condo construction starts fell 57% year-over-year in Q2 to just 1,276 units—an 84% drop over two years.

• Q2 completions rose slightly (2%) to 4,918 units, but 17,117 more units are scheduled for completion in the second half of 2025.

• Total completions for 2025 will reach a record 31,599 units, before declining to 18,037 in 2026 and just 10,841 by 2027.

Rental Supply Surges, Pushing Down Rents

• A record 18,119 condo leases were signed in Q2-2025, up 10% year-over-year.

• However, rental listings grew 13% to 24,918 units—surpassing the previous high from Q3-2020.

• The lease-to-listing ratio fell to a five-year low of 73%, while active listings rose 23% to 6,156 units.

• Average rents dropped 4.5% annually to $3.79 PSF, or $2,589 for a typical 683 SF unit.

🔍 What This Means for Buyers and Sellers

🏠 For Buyers:

• More Choices, Lower Prices: With record-high inventory and falling prices, buyers have more options and stronger negotiating power.

• Better Deals on Resale Units: Resale condos are significantly cheaper than new builds, with a growing price gap (66% premium for new).

• Rental Market Softening: If you're considering renting before buying, falling rents and rising supply make it a tenant-friendly market.

• Caution on New Builds: Many projects are being cancelled or converted to rentals, so buyers should vet developer reliability and timelines carefully.

🏢 For Sellers:

• Tougher Competition: With resale listings at record highs and sluggish demand, sellers face longer listing times and pressure to reduce prices.

• Lower Sales Ratios: Only 28% of resale listings are selling—half the historical average—making it harder to close deals.

• Price Pressure: Resale prices are down 14% over three years, and buyers are increasingly price-sensitive.

• Rental as Plan B: If selling isn’t viable, leasing out your unit may be an alternative—but expect lower rents and longer vacancy periods.

About Anne Lok, Broker  B. Arch, M.AAD.

Anne is a Toronto-based realtor with an architectural background, specializing in design-forward properties in historically rich neighbourhoods. She offers a customized approach for each client, helping buyers find homes that blend timeless charm with modern functionality. Anne also guides sellers in showcasing the unique appeal of their properties and assists investors in identifying opportunities with strong potential for growth.

Contact Anne for a Buyer or Seller consultation.