Posted on: July 30, 2025|By: Monica Orosz

The Ontario housing market in 2025 is expected to see a gradual recovery after a period of slower activity. While some forecasts predict price declines in the early part of the year, particularly in the first half, others anticipate stabilization and potential modest price growth later in the year. This recovery is primarily tied to anticipated interest rate cuts and improving economic confidence. Let’s examine some of the factors influencing the Ontario housing market and determine whether it’s a good time to buy or rent.

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Market Report Summary for 2025

The housing market in 2025 presents a mixed picture due to a combination of factors, including cooling trends, economic uncertainty, and varying regional impacts. While some areas may see price drops or slower growth due to factors such as trade tensions and slower population growth, others may experience increases due to pent-up demand and lower interest rates. Affordability remains a significant concern, and new construction is slowing, but rental markets are showing signs of easing.

Where is the Housing Market Headed?

According to CREA, national home sales in June were up 2.8% from May and 3.5% compared to June 2024.

The 2.8% bump is ‘seasonally adjusted,’ a statistical tool designed to smooth out expected changes, like the usual spring market rush. The actual sales numbers, which indicate the number of homes that actually changed hands, were also up from the previous year. With ongoing U.S. trade tensions producing a rocky first half of the year (even with the prime rate down 2.25% since June 2024), not all of Canada’s market numbers showed signs of pickup.

New listings fell by 2.9% (they rose by 3.1% in May)
The June MLS® Home Price Index dropped by 0.5% month-over-month, and by 3.7% year-over-year

The June (and May) sales boost, mainly driven by recovery in the Greater Toronto Area (GTA), might signal the start of an upward trend.

Market Report Summary for July 2025

The Greater Toronto Area’s average home price decreased by 3.8% year-over-year to $1,120,879
City of Toronto’s average home price decreased by 3.2% year-over-year to $1,155,616
Ottawa’s average home price increased by 5.5% year-over-year to $728,623
Mississauga’s average home price decreased by 5.0% year-over-year to $1,040,979

Today, you can obtain a five-year fixed-rate mortgage that is insured for approximately 4.15 percent, which is about 0.35 percentage points lower than rates on an uninsured mortgage.

Brampton’s average home price decreased by 5.1% year-over-year to $951,337
Hamilton’s average home price decreased by 4.8% year-over-year to $777,786
Waterloo Region’s average home price decreased by 3.6% year-over-year to $789,154
Oshawa’s average home price decreased by 3.8% year-over-year to $781,748

July 30, 2025 Update: Today’s Lowest mortgage rate in Ontario is 3.94% for a 3-Year Fixed.

Ontario Housing Market Statistics

Some vital Ontario housing statistics to be aware of from nesto.ca:

The average selling price of a home in Ontario decreased by 6.9% year-over-year to $804,700 in June 2025.
The average selling price of a single-family home in Ontario decreased by 6.8% year-over-year to $891,900 in June 2025.
The average selling price of a townhouse/multiplex in Ontario decreased by 8% year-over-year to $642,400 in June 2025.
The average selling price of a condo in Ontario decreased by 8.8% year-over-year to $537,100 in June 2025.
The average rent in Ontario decreased by 2% year-over-year to $2,329 for June 2025.
July 30, 2025: Today’s lowest mortgage rate in Ontario is 4.04% for a 5-year fixed.

Are People Buying Real Estate?

Sales activity in Ontario totaled 16,961 transactions in June 2025, a 1.7% decrease from May 2025 but a 1.1% increase from the same period in the previous year. Roughly translated, Ontario remains in buyer’s market territory. So, should you sell your house in 2025? Rising buyer demand could create significant opportunities for sellers who’ve been waiting for the right time to list their homes for sale. While property values are expected to grow slowly this year, there’s still potential for gains, making 2025 a potentially promising year for many sellers.

Ontario’s housing market hadan average home price of $852,036 in June 2025, down 1.1% from May 2025 and down 3.7% year-over-year. Sales activity in Ontario decreased by 1.7% from May 2025 but increased by 1.1% compared to the previous year. Ontario’s benchmark price had been the worst performer among the provinces this month (down 1.2%) and annually (down 6.9%). Runner-up BC is down only 2.3% year-over-year.

The average home sold price in the GTA was $1,101,691 in June 2025, representing a 5.2% year-over-year decrease and a 1.7% month-over-month decrease. Meanwhile, the GTA’s benchmark home price is down 5.5% year-over-year to $995,100. GTA home sales are up 0.5% year-over-year, with 6,243 transactions in June 2025.

Will Ontario Housing Market Prices Go Up?

Some experts believe that Ontario housing prices will increase by as much as 10%. In 2025, many experts feel that the central bank has a little more room to lower rates, but the heavy lifting has been done. Therefore, some are forecasting increases for the following reasons:

Toronto’s Condo Market Will Plummet

After a few years of stagnant pricing, the Toronto condo market is poised for a plunge. In the first half of 2024, sales of newly built condos declined by 57 percent year over year—the most significant slowdown since 1997—mainly due to high interest rates. The number of condo listings is now much higher than recent averages, and sales remain low. TD says prices will continue to decline, then recover modestly by year’s end. Then we may face the opposite problem: since the downward trend has spooked condo investors, who account for 70 per cent of pre-construction sales, condo starts have also dropped dramatically. In the long run, that could mean a condo shortage, driving prices up again.

Interest Rates Will Keep Dropping

The Bank of Canada has inflation for the most part under control, but the national GDP outlook looks less than optimistic. As a result, the BoC will continue to cut interest rates through 2025, as it did in 2024. As rates decrease, more buyers will enter the market, fueling increased competition. Softened lending rules will also heat the market. The government has increased borrowing caps for mortgages secured with a down payment of less than 20 percent from $1 million to $1.5 million. It also extended the maximum amortization from 25 to 30 years for some mortgages. The changes will make borrowing more accessible to a broader range of buyers, many of whom will begin house-hunting in 2025.

U.S. Firms Will Pour Billions into Canadian Real Estate

What we call a runaway housing market, U.S. real estate firms call an opportunity. Soaring prices, skyrocketing rents, and a growing population that’s unable to afford either have created massive demand for purpose-built rentals. Blackstone, the largest private equity firm in the world, acquired Canadian rental housing owner Tricon for US$3.5 billion in May. Meanwhile, Texas-based developer Hines LLP plans to invest up to $2 billion in land for large-scale, six- to eight-storey apartment towers in cities such as Toronto, Vancouver, Calgary, and Montreal. It’s also interested in reviving projects that have been stalled in recent years due to high interest rates and construction costs. Translation: It’s a good time to do business with Canada.

Labour Shortages Will Cause Construction Delays

The next decade will be a challenge for Canada’s construction industry. Between now and 2033, we’ll lose 263,000 construction workers to retirement. Making things worse: only about two per cent of Canada’s newcomers over the past decade have skilled-trade qualifications. Domestically, young Canadians are also increasingly choosing white-collar careers over blue-collar ones. This will put the brakes on Canada’s ambitious goal of building 3.9 million homes nationwide by 2031.

More Millennials and Gen Zs Will Buy Homes

Thanks to declining interest rates, rising wages, and, to a lesser extent, the new option of completing an entire mortgage application online, far more millennials and Gen Zs will eye homeownership than in recent years. A nationwide Scotiabank poll revealed that more than half of non-homeowning Canadians aged 18 to 34 plan to buy a home at some point in the next five years. That’s promising news: according to the same Scotiabank poll, only 26 per cent of 18-to-34-year-olds own a home today, compared to 47 per cent in 2021, and 35 per cent live with their families. In 2025, they’ll become bigger players in a hotter housing market.

A Wave of Mortgage Defaults Is Coming

In 2025, more than a million households will face mortgage renewals at elevated interest rates. The banks are ready for it, having already set aside more than $4.5 billion in provisions for credit losses. The fallout from broken mortgages isn’t just bad news for homeowners, but for the economy at large. Canadian households are already among the most indebted in the world. As defaults rise, banks may need to reserve more capital, potentially triggering a credit crunch and making borrowing more difficult.

Final Thoughts on the Ontario Housing Market

The Ontario housing market in 2025 is expected to experience a modest recovery, with sales increasing and prices stabilizing, although with regional variations. While some areas might experience price growth, others could see slower increases or even declines, particularly in more expensive markets. Overall, the market is predicted to remain in a buyer’s market territory. For more information about the Ontario Housing Market, be sure to read our corresponding articles listed below to help keep you abreast of the housing market.