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The headlines are loud again. Home sales are up double digits. Buyers are back. Market is heating up. But if you’re reading that and assuming we’ve returned to boom times in the Greater Toronto Area housing market, take a step back and squint a little. The numbers tell a different story. And in this business, it’s the fine print, not the front page, that tells you where things are headed.

Yes, sales are up. But from where?

A low tide makes for easy gains

The Toronto Regional Real Estate Board (TRREB) July 2025 report touts a 10.9 per cent year-over-year increase in sales. That’s true. But let’s not pretend this is a return to 2021. We’re comparing this year’s performance to a brutally slow July in 2024. Gains from a low base can feel impressive on paper but are thin when stretched across the market’s broader context.

Prices are still down. Inventory is piling up. And homes are taking longer to sell. Those aren’t hallmarks of a market in full swing, but signals of a fragile rebound struggling to find its footing.

Prices down, affordability up… for now

The average home price in the GTA sits at $1,051,719, down 5.5 per cent from last July. Detached homes are down 5.1 per cent, condos down a staggering 9.3 per cent. These certainly aren’t rounding errors. They’re meaningful corrections.

But here’s where it gets interesting: as prices fall, affordability improves, at least on the surface. And this shift has attracted interest from buyers who may have been sidelined during the market’s peak. That’s part of why sales are ticking upward. People aren’t chasing the market. They’re entering it because it finally came back to them.

However, affordability is a slippery word in this environment. Rates haven’t meaningfully dropped. Mortgage qualification is still tight. And for every buyer who enters, there’s another household staying on the sidelines, unsure if this is truly the bottom.

Supply outpacing demand

The stat I’m watching closely? Active listings are up 26.2 per cent year-over-year. That’s massive. There are now over 30,000 homes on the market across the GTA, more than we’ve seen in several years.

Meanwhile, new listings rose by only 5.7 per cent year-over-year (lesser than June’s uptick). So where’s the jump in active inventory coming from? It’s not new supply. It’s old supply that’s sitting longer. And that points to a demand-side problem.

Homes aren’t moving like they used to (recall 2021). The average time a home sits on market (LDOM) has jumped by 25 per cent year-over-year. Properties are lingering. The majority of buyers are still hesitant.

Condo carnage and suburban softness

If you’re holding a pre-construction condo right now, you don’t need a market report to tell you what’s happening. You’re feeling it in your inbox: assignment listings, price drops, incentives. The condo market is taking the brunt of the correction.

Condos in the 905 area saw prices drop over 10 per cent. Even in the core, where demand tends to be more resilient, prices slipped nearly 9 per cent. That’s a sharp fall for a segment that once promised endless investor upside.

Townhouses and semis, long regarded as middle-market staples, saw year-over-year price drops of 7.4 per cent and 2.3 per cent, respectively. Detached homes, down 5.4 per cent, landed squarely between the two.

What we’re seeing is a broad-based softness, not a sector-specific slump. Every major home type is feeling the chill.

A market without momentum

The problem isn’t that buyers don’t want to buy. It’s that the market lacks conviction. There’s no urgency. When rates were low and prices were climbing, hesitation was costly. Today, waiting is rewarded.

That shift in psychology is powerful. It rewires the market’s metabolism. Buyers negotiate harder. Sellers reduce expectations. And the entire transaction cycle drags out.

In markets like these, volume can rise, just as it did in July, but that volume is often more reactive than proactive. It’s opportunistic. Buyers are bottom fishing.

So, is this the bottom?

Maybe. But bottoms in real estate are rarely sharp, and they almost never announce themselves. More often, they flatten out like a tired breath. What July gave us was a market trying to stabilize, not one bursting back to life.

The real momentum will come when two things align:

1. Interest rates ease meaningfully, unlocking credit and restoring confidence.
2. Sellers recalibrate expectations to match what buyers can actually afford.

Until then, we’ll keep seeing this kind of sideways movement. A little more volume. A little less price. A few more listings. A few more delays.

It’s not a crash. It’s not a boom. It’s a slow digestion.

Policy smoke and mirrors

TRREB’s commentary on the foreign buyer ban is worth noting. While many Canadians believe foreign investment is locked out, that’s not entirely true. Exemptions exist for multi-unit properties, development land, and rural housing.

But let’s be clear: foreign buyers aren’t driving this market and their absence isn’t what’s causing the slowdown. Domestic affordability, debt levels, and rate sensitivity are doing that all on their own.

Blaming or praising foreign policy tweaks won’t change the fundamentals.

Clarity in the noise

This market isn’t easy to read. The data gives us mixed signals. The headlines bounce between optimism and doom. But when you strip away the noise, one thing becomes clear:

We’re in the hangover phase.

The excesses of 2021 and 2022 are still being worked out. Some households are over-leveraged. Others are still underhoused. Prices have corrected, but the economic backdrop remains uncertain, especially with the Canadian economy “treading water” as TRREB puts it.

This isn’t a market to fear. But it’s not one to chase either. It’s a time to observe, to act selectively, and to resist the spin.

Final word

Don’t mistake a flicker for a flame. July gave us a pulse, not a comeback. If you’re in the market, buying, selling or advising, your edge right now is in understanding nuance. Look past the headlines. Study the inventory. Watch the clock.

And above all, stay disciplined.

The market rewards patience. Always has.

Daniel Foch

Daniel Foch is the Chief Real Estate Officer at Valery.ca, and Host of Canada’s #1 real estate podcast. As co-founder of The Habistat, the onboard data science platform for TRREB & Proptx, he helped the real estate industry to become more transparent, using real-time housing market data to inform decision making for key stakeholders. With over 15 years of experience in the real estate industry, Daniel has advised a broad spectrum of real estate market participants, from 3 levels of government to some of Canada’s largest developers.

Daniel is a trusted voice in the Canadian real estate market, regularly contributing to media outlets such as The Wall Street Journal, CBC, Bloomberg, and The Globe and Mail. His expertise and balanced insights have earned him a dedicated audience of over 100,000 real estate investors across multiple social media platforms, where he shares primary research and market analysis.