The latest TRREB Market Watch report arrives at a moment when policymakers, industry groups, and many Realtors are eager for a narrative of recovery. It offers no such comfort. The October data confirms not merely a soft market, but a structural deterioration in the balance between supply and demand. 

Sales fell nearly 10 per cent year-over-year, active listings climbed to the highest October level ever recorded, and prices declined across every major property type and region. These are not the markers of a market finding equilibrium. They are the conditions of a market struggling to clear.

For much of 2025, falling prices seemed to lead to increased sales activity. As prices fell, more buyers could afford houses, so more purchased houses. But October has violently broken this trend, significantly slower than last year, with supply growing and demand falling. Should this trend continue, we’ll move deeper into buyer’s market territory and see further downside pressure on prices. Buyers have taken a step back to safety against renewed trade tensions, rising unemployment and increasing mortgage delinquencies. 

In spite of this, TRREB’s report headline (“More Choice, Greater Affordability for Buyers”) message focuses on improved affordability through lower mortgage rates and reduced selling prices. That framing obscures the magnitude of the shift underway. When home sales drop and inventory accelerates simultaneously, the issue is not simply buyer opportunity. It is the erosion of purchasing conviction and a widening disconnect between what sellers believe their homes are worth and what buyers are willing to pay. A decade of ultra-liquid conditions has given way to an environment where liquidity itself is failing.

The numbers reveal a market losing its floor

The GTA recorded 6,138 sales in October, the third-weakest October since at least 2010. The only weaker years were 2022 and 2023, both widely recognized as recessionary periods for real estate activity. Meanwhile, active listings surpassed 27,800, a 17 per cent annual increase and the largest October inventory level ever published by TRREB, as shown in the chart below. New listings have not collapsed. Demand has.

Prices are following. The average selling price declined more than seven per cent year-over-year, and the MLS HPI composite fell five per cent. Detached homes in the 416 dropped more than nine per cent. Condominiums, long considered the last rung of entry-level ownership, posted double-digit declines in sales and continued price softness. Even the segments once assumed to be supply-constrained are no longer insulated.

A market can absorb falling prices when turnover is strong and new buyers enter confidently. That is not the present situation. Homes are taking longer to sell. Relist cycles are increasing. Public sentiment surveys show heightened anxiety about employment security and renewal risk. The conditions that normally signal the bottom of a cycle, such as rapid absorption, visible investor re-entry and the return of bidding in pockets of the market, are absent.

Why TRREB’s framing misses the point

TRREB highlights lower mortgage payments as a positive development. The logic is correct but incomplete. Monthly payments are falling because both borrowing costs and asset values are falling together. That is not evidence of restored affordability but rather a symptom of waning demand meeting rising inventory. A household is not empowered by a lower payment if it does not trust its future income, nor by a reduced asking price if it expects that price to fall further.

The suggestion that the present environment favours buyers is accurate only in the narrow sense that buyers now hold greater negotiating leverage. For sellers, the implication is harsher. Each month of elevated inventory exerts incremental downward pressure on pricing expectations, particularly for those facing refinancing deadlines, investor exit timelines or job insecurity. Price discovery has not yet run its course, and the depth of unsold stock ensures it will continue.

The report also implies that a more predictable macroeconomic backdrop, including clarity on trade relations with the United States and China, could unlock pent-up demand. This underestimates the extent to which confidence has already fractured. The challenge is not merely uncertainty about external conditions. It is a shift in perception about the direction of housing as an asset class, following years in which price appreciation was treated as a near-guaranteed outcome.

The implications of excess supply

The gulf between active listings and transactions is now the widest in the data history (see the chart below). That spread matters because housing markets do not correct on price alone. They correct on time. As listing windows stretch and carrying costs accumulate, forced selling accelerates. The early signs are visible in investor-held properties where mortgages originated in 2020 to 2021 are approaching renewal at rates two to three times higher than their initial term. If wage growth and rent increases fail to offset those adjustments, more supply will enter the market under pressure rather than preference.

For policymakers, the situation complicates the usual prescription to build more housing. Supply expansion remains essential for long-term affordability, yet the near-term problem is not insufficient construction so much as insufficient absorption. Programs aimed at accelerating new starts risk backfiring if they collide with a demand downturn and a credit environment that remains restrictive. The next phase of housing policy must not only stimulate supply but stabilize the conditions under which that supply can be financed, purchased, and retained. Recent proposals to reduce upfront costs for first-time buyers in Ontario offer one such example.

For buyers, the opportunity is real but requires discipline. Lower prices and reduced competition do not automatically translate into strategic entry points. Markets in correction rarely move in straight lines. The prudent buyer evaluates not just headline prices but the trajectory of inventory, the stability of employment and the likelihood that financing conditions will shift again before maturity. The discount available today may expand tomorrow.

For sellers, realism is not optional. List-to-sale ratios are already reverting toward levels seen in the early 1990s, and the pool of buyers who can purchase without financing friction is narrowing. Pricing to the market, not to the memory of 2021 valuations, is now the difference between selling and relisting.

What comes next

The next decisive turn in the GTA housing market will not be triggered by a single rate cut or a cosmetic rebound in monthly sales. It will come when inventory begins to clear at a sustained pace and when buyers regain conviction in the trajectory of their own balance sheets. Neither condition is currently in place.

The October report will be read by some as evidence of a turning point in affordability. It reads instead as confirmation that the correction has more room to run. Markets do not bottom on hope. They bottom on exhaustion. The data shows a market still searching for that threshold.