If you’ve been watching the housing market closely, the past year offered something many buyers and renters have been waiting for: relief. After several years of rising costs and uncertainty, affordability improved in 2025, giving households across the Greater Toronto Area (GTA) more room to make decisions about their next move.

According to the TRREB’s year-end Market Watch report, economic uncertainty continued to influence housing decisions last year. Many households remained cautious, delaying buying plans as borrowing costs stayed elevated and concerns about job security persisted, even as market conditions began to ease. At the same time, higher listing inventory gave buyers more choice and greater negotiating power, easing price pressures across the region.

WHAT THE MARKET DATA SHOWS

Home sales declined in 2025 compared to 2024, while new listings increased year-over-year. This combination helped move the market toward better balance. Average selling prices trended lower over the year, creating more favourable pricing conditions for buyers and renters alike.

These trends matter because they signal a market that is more closely aligned with household purchasing power. When inventory rises and prices moderate, buyers have more options, sellers operate in a more stable environment, and renters considering ownership see a clearer path forward.

WHY CONFIDENCE MATTERS

Improved affordability alone does not drive housing activity. Confidence does. Households need to feel secure in their employment and income prospects before committing to long-term mortgage payments.

With pricing conditions now more supportive, confidence will determine when and how quickly pent-up demand translates into market activity, particularly as economic conditions stabilize and borrowing costs ease. Many buyers who stepped back over the past two years represent pent-up demand. They are now better positioned to act when confidence strengthens, and that shift will drive noticeable change in sales and pricing trends going forward.

THE ROLE OF POLICY

Public policy will play an important role as the market moves toward recovery. Tax relief and cost-of-living measures can help restore consumer confidence and support household stability. Fair and responsible tax policies can put more money back into people’s pockets and help ensure housing remains within reach.

Housing affordability is not just a market issue. It directly affects families, newcomers, and communities across the GTA.

WHAT’S NEXT

The housing market does not turn overnight. However, the progress reflected in 2025 is meaningful Stronger market fundamentals have set the foundation for recovery, but confidence will ultimately determine its pace. With supportive economic conditions and sound policy decisions, 2026 can mark a return to healthier levels of market activity.

To learn more about the latest market trends and access TRREB’s Market Watch reports, visit trreb.ca.