If you’ve ever wondered why your mortgage payments change, or why savings account rates sometimes feel like a rollercoaster rid chances are, it all ties back to one powerful lever in Canada’s economy: the Bank of Canada’s overnight lending rate.

What Exactly Is the Overnight Lending Rate?

Let’s start simple.

The overnight lending rate is the interest rate at which big Canadian banks lend money to each other for a single day literally “overnight.” They do this to keep their daily balances in check and meet government requirements.

But here’s the catch: this short-term rate isn’t just a back-office banker thing. It’s the starting point for many interest rates you encounter every day—like:

• Your variable mortgage rate

• Interest on lines of credit

• Business loans

• Even the rate you earn on savings accounts or GICs

When the Bank of Canada adjusts this rate, it sets off a chain reaction across the entire financial system.

Why Does the Bank of Canada Change the Rate?

The short answer? To keep the economy stable and inflation under control.

The Bank of Canada aims to keep inflation around 2%. If prices are rising too fast (think: groceries getting more expensive every week), they’ll increase the rate to cool things down. If the economy is too slow, they’ll lower the rate to encourage spending and investment.

Here’s how that plays out:

How Does the Overnight Rate Actually Work?

The Bank of Canada doesn’t force the market to follow its lead. Instead, it sets a target rate and works within a range (called the operating band). Let’s say the target is 2.75% then the actual rate banks charge each other usually stays between 2.5% and 3.0%.

To keep things on track, the Bank uses something called open market operations, buying and selling government bonds to manage how much money is floating around.

This may sound technical, but think of it like adjusting the thermostat in your home. Too hot? Turn it down. Too cold? Turn it up. The Bank does the same, just with interest rates and money flow.

The Overnight Rate During COVID-19

Let’s rewind to early 2020. The COVID-19 pandemic threw a wrench into the global economy. Businesses shut down. Jobs were lost. Uncertainty was everywhere.

In response, the Bank of Canada slashed the overnight rate from 1.75% to 0.25% the lowest it could go. Why? To make borrowing easier and cheaper, so people and businesses could stay afloat.

What happened next:

• Mortgage rates dropped to record lows. Home buying surged.

• Lines of credit became cheaper, helping families manage tight budgets.

• Businesses borrowed at lower costs to keep operations running.

It worked! But it also sparked high demand, rising prices, and eventually... inflation.

How Does This Affect You in the Real World?

Even if you’ve never heard of the overnight rate before, its effects probably show up in your wallet. Here’s how:

1. Borrowing Costs

If you have a variable mortgage, line of credit, or floating-rate loan, your payments likely rise and fall with the overnight rate. Higher rate = higher payments. Lower rate = more room in your budget.

2. Savings & Investments

GICs and savings accounts offer better returns when rates are high. When rates drop, savers often look to riskier investments for better yields.

3. Housing Market Trends

Interest rates influence how affordable mortgages are. Lower rates can fuel demand and push home prices up. Higher rates cool the market and reduce borrowing power.

What’s Happening in 2025?

Right now, the overnight rate sits at 2.75%, after several cuts throughout 2024.

This has brought some relief to homeowners and borrowers. But the economic road ahead is far from smooth.

Inflation vs. Trade Tensions

While inflation has come down, 2025 has brought new challenges—especially around international trade.

New U.S. tariffs on Canadian steel, aluminum, and energy have triggered countermeasures from Canada. This back-and-forth is raising costs for Canadian businesses and creating uncertainty.

For the Bank of Canada, this means walking a tightrope:

• Keep inflation under control ✅

• Support economic growth ✅

• Avoid spooking markets during trade conflicts ✅

In short? The overnight rate may stay put for a while, but it’s anyone’s guess what comes next.

Why You Should Pay Attention

You don’t need to track every policy announcement or read through every economic report. But keeping an eye on the Bank of Canada’s overnight rate is a smart move especially if you’re:

• A homebuyer or current homeowner

• A business owner managing loans or credit

• A saver or investor planning your financial future

Understanding this one rate can help you make more informed decisions, plan better, and stay ahead of market shifts.

Because in today’s world, what you don’t know about interest rates can cost you.

📬 Want to stay updated on how rates could affect your mortgage, your savings, or your investment strategy? Subscribe to my newsletter or reach out anytime.

The Greater Toronto Area (GTA) just recorded its best July for home sales since 2021, that has real estate professionals and buyers paying close attention.

According to the latest figures from the Toronto Regional Real Estate Board (TRREB), a total of 6,100 home sales were reported through the MLS® System in July 2025, representing a 10.9% increase compared to July 2024. New listings were also up by 5.7% year-over-year, reaching 17,613.

As a real estate professional working in the GTA, I’m seeing firsthand how market conditions are shifting. This isn't just a seasonal bump; improved affordability and lower borrowing costs are gradually bringing more buyers back into the market.

What’s Driving the Increase in Home Sales?

TRREB President Elechia Barry-Sproule put it well “Improved affordability, brought about by lower home prices and borrowing costs, is starting to translate into increased home sales. More relief is required, particularly where borrowing costs are concerned, but it’s clear that a growing number of households are finding affordable options for homeownership.”

Let’s break that down:

• Home prices have decreased:

  The MLS® Home Price Index Composite benchmark fell by 5.4% year-over-year.

• Average selling price sits at $1,051,719, a 5.5% drop from July 2024.

• More households can now enter the market, particularly first-time homebuyers and families looking to upsize.

These are significant shifts. After several years of rapidly rising home prices and interest rate hikes, many buyers took a wait-and-see approach. But now, with a bit of breathing room, confidence is starting to return.

A Tighter Market, But Not Overheated

While sales rose sharply compared to new listings, listings did not keep pace a sign of modest tightening in market conditions.

From a seller’s perspective, this could mean a slight advantage: more buyer competition and fewer available properties.

From a buyer’s side, it means more urgency, but also more opportunities, especially in neighborhoods where prices have softened but value remains strong.

On a seasonally adjusted basis, both home sales and new listings rose compared to June 2025, but sales rose at a higher rate, another indicator that demand is outpacing supply just slightly.

Housing as a Catalyst for Economic Growth

In a broader economic context, TRREB Chief Information Officer Jason Mercer highlights how the housing market could play a pivotal role in driving domestic growth “The housing sector can be a catalyst for growth, with most spin-off expenditures accruing to regional economies. Further interest rate cuts would spur home sales and see more spin-off expenditures, positively impacting the economy and job growth.”

This underscores why real estate isn’t just about property it’s tied to construction jobs, legal services, moving companies, furniture sales, renovations, and more. When home sales pick up, the entire ecosystem benefits.

Foreign Buyers and the Truth Behind the Ban

There’s also a misconception circulating that foreign nationals are completely banned from buying residential property in Canada. That’s not entirely accurate.

TRREB CEO John DiMichele clarified: “There are exemptions that allow non-residents to buy property, resulting in spin-off benefits to the economy.”

Foreign buyers can still purchase:

• Multi-unit residential buildings (4+ units)

• Vacant land or development land

• Recreational or rural properties outside urban centres

So, despite restrictions, international interest remains a factor, especially in the luxury and development sectors.

What This Means for You

If you're a buyer looking for your first home, a seller wondering if it's the right time to list, or an investor eyeing the long-term picture, the GTA housing market is showing positive momentum.

Key takeaways:

• Prices are more affordable than last year.

• Interest rates are stabilizing.

• Demand is returning gradually but steadily.

• Market conditions are tightening, but not overheated.

As a real estate professional here in the GTA, I’m keeping a close eye on this evolving landscape. If you’re thinking of making a move, let’s have a conversation about where the opportunities lie in today’s market.

Get professional guidance based on real-time market data and local insights. Contact me today for a no-obligation consultation.

The Bank of Canada recently announced that they will be holding its key policy rate steady at 2.75%

Now, what does that actually mean for the real estate market and your next move?

💡 Quick Overview

The Bank of Canada decided not to change its interest rate. This key rate is the one that influences how much banks charge us on loans, mortgages, and lines of credit.

Right now:

• Policy rate stays at 2.75%

• Bank rate at 3%

• Deposit rate at 2.70%

In simple terms, borrowing costs are holding steady for now.

🌍 What’s Behind the Decision?

Global trade tensions are still simmering, especially between the U.S. and other countries. Tariffs are making things unpredictable. These tensions affect everything from the cost of goods to how businesses operate, and even the strength of our own economy here in Canada.

Despite all this, Canada’s economy has shown some resilience. We had strong growth earlier this year, but that was partly due to businesses rushing to export goods ahead of new U.S. tariffs. After that rush, the economy slowed down a bit, GDP likely shrank by 1.5% in Q2.

And while unemployment is up slightly (6.9% in June) and wage growth is slowing, the overall picture isn’t all doom and gloom. Some sectors are still hanging in there.

🏘️ Why It Matters for Buyers and Sellers

If you're a buyer, this pause in interest rate changes is actually welcome news. It signals stability. Mortgage rates are closely tied to these decisions and with no hike this month, you're not seeing your future payments creep higher (at least for now).

If you're a seller, this stability helps buyer confidence. When borrowing costs are predictable, more people feel comfortable entering the market. That can help support demand for your property.

Plus, inflation is currently sitting around 2%, which means the Bank of Canada isn’t in a rush to cool the economy further unless something shifts.

What Could Happen Next?

The Bank is watching several moving parts closely:

• Will U.S. tariffs slow our exports more?

• Will uncertainty make businesses pull back on hiring or investing?

• Will inflation heat up if companies pass on more of their cost increases?

If trade disruptions ease or the economy weakens further, there could even be a rate cut in the future. On the flip side, if inflation surprises on the upside, the Bank might have to tighten again.

What Should You Watch As a Buyer or Seller?

1. Mortgage rates: No change now, but keep your eye on fixed vs. variable trends.

2. Inflation: If inflation stays tame, pressure for rate hikes eases, this is a good news for affordability.

3. Economic confidence: The more stable things feel, the more active buyers and sellers become.

4. Global trade headlines: What’s happening in the U.S. and China might sound far away, but it has ripple effects here especially if it impacts jobs and costs.

📅 What’s Next?

The next Bank of Canada rate decision comes on September 17, 2025. That’s the date to circle if you’re watching the market or thinking of making a move.

We’re in a wait-and-see phase. Rates are holding steady, the economy is adjusting, and the real estate market is still finding its rhythm in this post-tariff, post-pandemic world. Whether you're buying your first home, upsizing, or planning to sell, it's a good time to stay informed and to keep asking the right questions.

If you ever want to talk through how all of this might affect your next step, we're always here to help interpret the bigger picture. But for now breathe easy, the rates are staying put.

Subscribe to our newsletter to stay posted on future rate updates.

Affordability improves, but uncertainty lingers. Here’s what homebuyers and investors need to know.

If you've been sitting on the fence about entering the Greater Toronto Area real estate market, you’re not alone. June 2025 saw some interesting developments that could tip the scales for buyers but it's not as straightforward as just price drops or lower rates.

Whether you're a first-time buyer looking to secure your starter home, or an investor waiting for the right conditions to expand your portfolio, this month’s market snapshot is worth a closer look.

Let’s break down what’s happening, why it matters, and what it could mean for your next move in real estate.

✅ Affordability is Improving — But Caution Remains

Good news first: housing affordability continued to improve in June 2025.

That’s largely thanks to two things:

• Lower average selling prices compared to this time last year

• Reduced borrowing costs (interest rates aren’t as punishing as they were in 2024)

The average GTA home sold for $1,101,691 in June, which is 5.4% lower year-over-year. This drop, combined with easing mortgage rates, means that monthly payments are becoming more manageable for many households.

But here’s the twist: despite these improvements, many potential buyers are still hesitant. Economic uncertainty ranging from trade tensions to crime and safety concerns continues to influence consumer confidence.

📉 Sales Are Down Year-over-Year, but Rising Month-to-Month

Let’s talk numbers:

• 6,243 home sales were recorded in June, a 2.4% drop from June 2024

• But on a seasonally adjusted basis, sales were up compared to May 2025

• New listings rose year-over-year by 7.7%, giving buyers more choice

• Month-over-month, however, listings actually dropped tightening inventory again

What does that mean?

There’s more selection than last year, and buyers are negotiating better deals, especially with sellers adjusting to current price trends. But fewer new listings in recent weeks could put upward pressure on prices if buyer activity picks up.

🧠 What This Means for Buyers and Investors

🏠 First-Time Buyers:

This could be the window of opportunity you've been waiting for.

With more room to negotiate and slightly lower prices, you have a better chance of entering the market before it heats up again. Just keep in mind that economic uncertainty still lingers, so make sure your financial foundation is solid before diving in.

💼 Investors:

Lower prices and more supply could signal smart buying opportunities especially if you’re looking to flip or rent. But remember: the market isn’t booming just yet. You may need to play the long game for returns, especially if you’re eyeing appreciation-based gains.

💬 Looking Ahead: What Could Shift the Market Next?

According to TRREB’s Chief Information Officer, two additional interest rate cuts and improved U.S.-Canada trade relations could give the market a significant boost. Lower borrowing costs would make homeownership even more attainable, potentially increasing competition and raising prices again.

There’s also growing concern around public safety, with a spotlight on home invasions and carjackings in the GTA. While the government is working on tougher crime legislation, this issue could influence neighborhood desirability and buyer confidence in specific areas.

The GTA housing market is showing signs of steady recovery, and there are opportunities for strategic buyers and investors. But it’s not a free-for-all—uncertainty still plays a big role in decision-making.

If you’re thinking about buying, stay informed, assess your risk tolerance, and work with professionals who understand the current landscape. The rest of 2025 could bring more shifts—so be ready to move when the time is right.

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The Greater Toronto Area (GTA) real estate market showed more signs of change in May 2025, offering improved affordability and greater housing inventory compared to the same time last year. While home sales were down, more listings gave buyers better choices and stronger negotiating power.

If you’ve been watching the Toronto housing market and wondering if now is a good time to buy, here’s what you need to know.

🔍 What Happened in the GTA Housing Market – May 2025

According to the Toronto Regional Real Estate Board (TRREB), there were 6,244 home sales in May 2025, which is 13.3% fewer sales compared to May 2024. However, new listings went up by 14%, reaching a total of 21,819 homes listed on the MLS® System.

This means buyers now have more options than they did last year, which helps them take their time, compare properties, and negotiate better deals.

“Homebuyers have certainly benefited from greater choice and improved affordability this year,” said TRREB President Elechia Barry-Sproule. “But each neighbourhood is different, and working with a REALTOR® who knows your area is key.”

💰 Have Home Prices Dropped in the Greater Toronto Area?

Generally speaking, yes. Average prices have come down a bit. The average across the GTA was $1,120,879 in May 2025—down 4% year-over-year. The MLS® Home Price Index, which measures home value trends more accurately than averages alone, also dropped 4.5% compared to May 2024. Not all property types and areas are equal with some doing better then others.

However, compared to April 2025, both prices and sales slightly increased month-over-month, showing early signs of stability in the market.

📉 Why Are Sales Still Down?

You might wonder if homes are more affordable and borrowing costs are lower than last year, why are fewer people buying?

TRREB Chief Information Officer Jason Mercer explained that the slowdown isn’t just about prices or mortgage rates—it’s about economic confidence.

“Once households feel more secure about trade stability and economic growth, home sales will likely pick up. A further drop in interest rates would also encourage more activity, especially from first-time buyers.”

🏗️ What Could Help Canada’s Housing Market?

TRREB’s leadership also called for more action from the federal government to address long-term housing affordability. Some key suggestions include:

• Lowering housing taxes and fees

• Encouraging innovative construction technologies

• Speeding up the home building approval process

• Supporting more housing development across Canada

“Home construction not only adds supply but also boosts the economy. And with inflation staying low, a rate cut would help even more,” added TRREB CEO John DiMichele.

The Toronto real estate market in May 2025 is leaning more in favor of buyers, thanks to more homes for sale and softer prices. Still, many people are cautiously waiting for better economic news or lower interest rates.

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The Bank of Canada just announced that it’s keeping its key interest rate steady at 2.75%. That means borrowing costs, like loans and mortgages, aren’t going up (at least for now). The Bank Rate is set at 3%, and the deposit rate is 2.70%. So, why did the Bank decide to hold steady?

There’s still a lot of tension around global trade especially between the U.S. and China. While things have cooled a little and new talks are happening, the situation is still unpredictable. Tariff rates (those taxes on imports) are much higher than they were at the start of 2025, and more changes could be on the way.

Even though the world economy has been holding up, some of that strength came from businesses rushing to act before new tariffs kicked in. That’s not likely to last. In the U.S., people are still spending, but imports have slowed the economy a bit. Inflation in the U.S. is above 2%, and Europe is leaning on exports and defence spending. China’s growth is slowing down, too.

What’s Happening in Canada?

Canada’s economy grew by 2.2% in the first quarter—slightly better than expected. A big part of that growth came from increased exports to the U.S. and businesses stocking up on inventory. But consumer confidence has dropped, and people are spending a bit less. Housing activity is down, and unemployment has gone up to 6.9%, especially in industries that depend heavily on trade.

Looking ahead, the Bank expects the Canadian economy to slow down in the second quarter. Exports and inventory boosts are expected to fade, and household and business spending is likely to stay soft.

About the Inflation

Canada’s inflation rate dropped to 1.7% in April, mostly because the federal carbon tax was removed. But if you take taxes out of the picture, prices actually rose by 2.3%—a bit higher than the Bank expected.

People are still worried that tariffs will make things more expensive, and many businesses say they plan to pass those costs onto customers. So, even though the economy is softening, price pressures haven’t gone away.

Why the Bank Is Staying Put (For Now)

With all this uncertainty—especially around U.S. trade policy—the Bank of Canada is choosing to wait and see. Some parts of the economy are slowing, but inflation is still higher than they’d like in certain areas. The Bank wants to make sure inflation doesn’t get out of control, while also not putting more strain on a slowing economy.

They’re watching a few key things very closely:

• Will U.S. tariffs reduce demand for Canadian products?

• How will this affect investment, jobs, and household spending?

• How quickly will rising costs show up in consumer prices?

• Are inflation expectations rising?

What’s Next?

The Bank’s next interest rate decision and full economic report will be released on July 30, 2025. Until then, they’ll be keeping a close eye on the data and any changes in global trade policies.

The Bank of Canada is staying cautious. The economy is showing some cracks, but inflation is still a concern. So, they’re keeping rates steady while they wait for more clarity—especially from our neighbours in the U.S.

If you're a business owner or homeowner, now might be a good time to review your financial plans. While rates aren’t going up, the outlook remains uncertain.

As expected, spring brought a bit more action to the market compared to March. More homes were sold in April than the previous month, which is pretty normal for this time of year. But here’s the thing: when you compare it to April last year, home sales were actually down by 23.3%.

That means fewer people are buying homes compared to a year ago—and one of the main reasons is that many are waiting for borrowing costs to come down. People also want a bit more clarity about where the economy is heading before making a big decision like buying a home.

Prices Have Dropped

The average selling price in the GTA in April 2025 was $1,107,463, which is down 4.1% from last year. And the MLS® Home Price Index, which gives a better picture of price trends, dropped by 5.4% year-over-year. However, it’s worth noting that average prices have now increased for the third month in a row. So while prices are still lower than they were a year ago, they have been quite stable with modest price increases on a on a month-to-month basis.

What does that mean for buyers and sellers?

• For buyers: Lower prices, combined with slowly improving borrowing conditions, mean monthly mortgage payments are becoming a bit more affordable. You also have a lot more homes to choose from right now, giving you some negotiation power.

• For sellers: It's a more competitive market, so pricing your home right is key. With inventory being higher, buyers have options—and they’re taking their time to find the best deal.

More Homes Are Being Listed

New listings rose by 8.1% compared to April 2024. That’s good news for buyers—there’s more inventory on the market, which gives you more choice and helps balance prices.

Economic Uncertainty Still Looms

There’s still a lot of uncertainty floating around—especially when it comes to the broader economy and Canada’s trade relationship with the U.S. According to TRREB President Elechia Barry-Sproule, if things improve economically and internationally, we might see a bump in market activity in the months to come.

Buyers may find more breathing room to make decisions, while sellers will need to adjust their expectations and work with the right strategy to sell in today’s market.

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The Canadian housing market started 2025 on two very different paths—some areas are heating up, while others are cooling down.

Let’s start with the big picture. Home prices across Canada went up slightly in the first few months of the year. On average, prices rose 2.1% compared to last year, and 1.2% compared to the end of 2024. But not every area is following the same trend.

In expensive cities like Toronto and Vancouver, home prices have actually gone down a bit. In the Greater Toronto Area (GTA), prices dropped by 2.7% year-over-year, and condos saw an even bigger drop of 4%. Many buyers in these cities are feeling unsure because of ongoing political and economic issues—especially the trade tensions with the U.S. As a result, some people are waiting to buy, hoping for more clarity or better deals.

On the other hand, more affordable areas like Quebec, the Prairies, and Atlantic Canada are seeing steady growth. Quebec City is leading the way with a 17% price increase compared to last year. Montreal is also seeing strong growth. These regions are benefiting from a mix of lower interest rates, fewer homes for sale, and strong demand from buyers looking for more budget-friendly options.

When it comes to how Canadians feel about the economy, it’s a mixed bag. About half of Canadians say they’re confident in the country’s economic future, while the other half are not. People in Quebec are the most optimistic, while those in Manitoba, Saskatchewan, and Alberta feel the least confident—especially in places like Fort McMurray.

Despite the uncertainty, Canada’s real estate market is holding up well. Our financial system is strong, and even with all the global challenges, home prices remain fairly stable. Interest rates have come down quite a bit since last year, making it a better time for some buyers to borrow money. Experts say more rate cuts could come later this year if things stay on the current path.

With a federal election coming soon, housing affordability is a big issue. Each political party has a plan to make housing more accessible—whether that’s building more homes, cutting taxes, or helping first-time buyers. While these ideas could help over time, real change will take cooperation and long-term effort from all levels of government.

Looking ahead, Royal LePage expects home prices across Canada to rise about 5% by the end of the year. In the GTA, prices are expected to rise by 3.5%, though that’s a bit lower than earlier forecasts because the market has been slower than usual.

Canada’s housing market is split. Expensive cities are seeing a slowdown, while smaller, more affordable regions are picking up speed. If you’re buying or selling, it’s important to understand your local market. In quieter markets like Toronto, there may be good opportunities for buyers to negotiate. In faster-moving areas like Quebec, acting quickly could make a big difference.

No matter where you are, the real estate market continues to be a solid long-term investment—and those who stay informed and prepared will be in the best position to make smart decisions.

Check out the Royal LePage Q1 2025 report here.

The Bank of Canada has decided to keep its main interest rate at 2.75%, as concerns about global trade and economic uncertainty continue to grow.

A big reason for the cautious approach? Ongoing trade tensions, especially coming from the U.S., have made the economic outlook unpredictable. Depending on how things play out, Canada could either stay on a steady path—or face a recession if trade conflicts drag on.

BOC is Considering Two Possible Scenarios Ahead

Scenario 1: If tariffs stay limited, Canada’s economy may slow temporarily, but inflation will stay close to the 2% target.

Scenario 2: If tensions escalate, we could see a recession in Canada with inflation possibly rising above 3% next year.

There’s no clear path forward yet, and a lot depends on decisions made outside of Canada.

What’s Happening Globally?

• In the U.S., growth is slowing, and inflation worries are rising.

• In Europe, growth remains weak.

• China was doing well but is starting to cool down.

• Markets everywhere are shaky due to constant tariff changes and uncertainty.

• Oil prices have dropped, signaling weaker global growth.

What’s Canada’s Situation?

The economy is showing signs of slowing down:

• People and businesses are spending less.

• Hiring is slowing, and March saw a drop in employment.

• Inflation was 2.3% in March, but expected to dip a bit due to lower oil prices and the removal of the carbon tax. Still, higher prices may come back due to tariffs and supply issues.

Looking Forward

The Bank of Canada says it’s staying cautious. They want to support economic growth while keeping inflation under control. They’ll keep an eye on how rising costs, weaker demand, and changing expectations affect things over time.

Check out the Bank of Canada's recent policy rate release here.

The Bank’s next interest rate announcement is set for June 4, 2025, and we’ll get another full economic update in July.

March 2025 brought a mix of positive news and continued caution to the Greater Toronto Area (GTA) real estate market. While affordability has improved thanks to lower borrowing costs and softer home prices, many buyers are still sitting on the sidelines—waiting for greater economic certainty and more favorable conditions.

Homeownership Gets Slightly More Affordable

Compared to March 2024, homeownership in the GTA became more financially accessible. According to the Toronto Regional Real Estate Board (TRREB), both home prices and borrowing costs declined over the past year, making monthly mortgage payments more manageable for potential buyers.

TRREB President Elechia Barry-Sproule noted that “homeownership has become more affordable over the past 12 months,” and with expected interest rate cuts this spring, affordability may continue to improve. Increased inventory is also giving buyers more options—and more negotiating power.

Prices Down, Listings Up

The average selling price in March 2025 was $1,093,254, a 2.5% decrease compared to the same month last year. Meanwhile, the MLS® Home Price Index Composite benchmark dropped 3.8% year-over-year, pointing to a gradual correction in home values.

On the listing side, sellers were more active. The GTA saw 17,263 new listings hit the market—a 28.6% increase from March 2024. This means buyers now have more selection, which could further ease competition and keep prices from spiking in the short term.

Sales Activity Slows Amid Cautious Optimism

Despite improving affordability, home sales were down by 23.1% year-over-year, with 5,011 transactions recorded through TRREB’s MLS® System in March 2025. Even on a seasonally adjusted basis, sales dipped compared to February.

Why the hesitation?

A lot of it comes down to uncertainty. TRREB Chief Information Officer Jason Mercer pointed out that concerns around job security and broader economic conditions—especially Canada’s trade relationships and the upcoming federal election—are prompting many households to wait and see before making big financial commitments like buying a home.

What This Means for Buyers & Sellers

For Buyers:

If you’re financially ready, this could be a window of opportunity. With more listings and softening prices, you have room to negotiate and find the right fit. And if interest rates drop later this year, you may have the chance to refinance for better terms.

For Sellers:

With more competition on the market, pricing your home strategically is crucial. Presentation matters too—homes that show well tend to sell faster. Work with an agent who understands the nuances of today’s market and can help you stand out.

What Could Shift the Market?

Spring 2025 may bring some momentum back to the market if interest rates begin to fall and if economic confidence improves. According to TRREB CEO John DiMichele, access to affordable housing remains a top priority among Canadians, and government action post-election could play a role in supporting both supply and demand.

In the meantime, the GTA remains a buyer-friendly market—but one that could shift quickly depending on economic and policy developments.

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If you’ve been watching the Toronto real estate market, you know things are shifting. February 2025 was all about buyer advantage—with more listings, slightly softer home prices, and a cautious approach from buyers. So, what does this mean if you're thinking about buying or selling in the GTA housing market?

Home Prices See a Small Drop

In February 2025, the average home price in Toronto and the GTA came in at $1,084,547, marking a 2.2% drop from February 2024. The MLS® Home Price Index Composite benchmark also edged down 1.8% year-over-year.

Month-over-month, prices softened slightly after seasonal adjustment, showing that Toronto home values are stabilizing but still adjusting to market conditions.

More Homes for Sale, Giving Buyers Options

February saw 12,066 new listings hit the market—up 5.4% from last year. That means buyers have more homes to choose from, leading to better negotiation power in the Toronto housing market.

For sellers, this means pricing your home competitively is key. Overpricing could leave you sitting on the market longer than expected.

Home Sales Slow Down, But Opportunity Awaits

Despite more listings, home sales dropped 27.4% year-over-year, signaling that buyers are taking their time. High mortgage rates are a major factor, making affordability a challenge for many. But with a potential interest rate cut in Canada later this year, we could see demand pick up in the second half of 2025.

Why Are Buyers Waiting?

Beyond mortgage rates, economic uncertainty and Canada’s trade relationship with the U.S. are making some buyers hesitant. According to TRREB President Elechia Barry-Sproule, many GTA residents want to buy, but monthly mortgage payments remain a challenge.

Jason Mercer, TRREB’s Chief Market Analyst, noted that lower borrowing costs and a clearer economic outlook could bring more buyers into the market later in 2025.

What This Means for Buyers & Sellers

For Buyers:

With more homes for sale in Toronto, now’s a good time to shop around and negotiate. If you find the right property, you might be able to secure a deal. Plus, if mortgage rates drop, you could refinance at a lower rate later.

For Sellers:

The market is competitive, so pricing realistically and presenting your home well (think staging, decluttering, and professional photos) can make all the difference. Work with a GTA real estate agent who understands the latest trends to maximize your sale price.

What’s Next for the GTA Housing Market?

The next few months will be key. If interest rates in Canada drop, expect home sales in Toronto to pick up. For now, it’s a buyer’s market in many areas, but the landscape could shift quickly.

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The Bank of Canada has lowered its key interest rate by 25 basis points, bringing it down to 2.75%. This decision could have a broad impact, influencing mortgage rates, loan costs, and overall economic activity.

Why Did the Bank of Canada Lower Interest Rates?

Simply put, the economy has been slowing down, and while inflation has moderated, it remains a concern. The Bank of Canada is working to balance price stability with economic growth. Lowering interest rates makes borrowing more affordable, potentially encouraging increased spending and investment by individuals and businesses.

What’s Going On with the Economy?

Canada’s economic growth has been sluggish in recent months. While job creation continues, wage growth has not kept pace with rising living costs. Inflation has come down from its peak, but essentials like groceries and rent remain expensive.

Additionally, global economic uncertainty—such as U.S. trade policies and tariffs—poses potential risks to Canada’s exports. If trade slows, economic growth could be further impacted. The Bank of Canada is closely monitoring these factors as it makes decisions on future interest rate adjustments.

How Does This Affect You?

For Homeowners and Buyers

• Variable-rate mortgage holders may see a slight decrease in monthly payments.

• Those renewing a fixed-rate mortgage could benefit from lower rates compared to last year, making it essential to shop around for the best deal.

• First-time homebuyers may find borrowing slightly more affordable, though home prices in many cities remain high.

For Loans and Credit Cards

Lower interest rates can reduce costs for personal loans, lines of credit, and business financing. While credit card interest rates are less directly impacted, those carrying debt may want to explore lower-interest alternatives.

What’s Next?

The Bank of Canada will continue assessing inflation and economic performance before making further rate decisions. If economic conditions improve, additional cuts may not be necessary. However, if inflation remains high or the economy weakens further, another rate reduction could be on the horizon.

This rate cut is designed to provide economic stability and make borrowing more accessible. Whether you're a homeowner, prospective buyer, or simply managing your finances, staying informed will help you make well-informed financial decisions. Keep an eye on future announcements to stay ahead of potential changes.