TORONTO — Home sales in the Greater Toronto Area fell by more than one-quarter in February compared with a year ago despite buyers maintaining "substantial" negotiating power.
The Toronto Regional Real Estate Board said Wednesday that 4,037 homes were sold last month, down 27.4 per cent compared with 5,562 in February 2024.
Sales were down 28.5 per cent from January on a seasonally adjusted basis.
"Many households in the GTA are eager to purchase a home, but current mortgage rates make it difficult for the average household to comfortably afford monthly payments on a typical property," said TRREB president Elechia Barry-Sproule in a press release.
The average selling price declined 2.2 per cent compared with a year earlier to $1,084,547, as the composite benchmark price, meant to represent the typical home, was down 1.8 per cent year-over-year.
Meanwhile, 12,066 properties were newly listed in the GTA last month, up 5.4 per cent compared with last year, as total inventory in the region soared 76 per cent to 19,536.
The imbalance of sales and new inventory is providing potential buyers with more favourable conditions, with some looking to take advantage of slightly lower prices, said Toronto-based broker Jessica Hammell of Real Broker Ontario.
"There's more listings, there's less competition, there's a potential for a little bit more leverage than we've seen in the past," she said.
"But there's also that affordability issue. Yes, rates are coming down, but it's still very expensive to purchase in Toronto."
The board said some buyers remain hesitant for that reason, but an anticipated decline in borrowing costs in the coming months should improve affordability.
It added that macroeconomic factors are also part of the equation. TRREB chief market analyst Jason Mercer noted that Canada's imperiled trade relationship with the U.S. could be spooking would-be buyers.
“On top of lingering affordability concerns, homebuyers have arguably become less confident in the economy," Mercer said.
"If trade uncertainty is alleviated and borrowing costs continue to trend lower, we could see much stronger home sales activity in the second half of this year."
On Tuesday, U.S. President Donald Trump's executive order hitting Canada with 25 per cent across-the-board tariffs, except for a 10 per cent levy on Canadian energy, took effect. Canada's response includes retaliatory tariffs on $155 billion worth of American goods.
"Real estate is one of those things that doesn't exist in a vacuum or a bubble. Consumer confidence with global trade policies, economic changes, political elections, things of that nature — they all play a significant role," said Hammell.
"I find when there's uncertainty, status quo kind of holds and people just take a wait-and-see approach, which we've seen for quite some time."
In the City of Toronto, there were 1,540 sales last month, a 21.2 per cent drop from February 2024. Throughout the rest of the GTA, home sales fell 30.8 per cent to 2,497.
All property types saw fewer sales in February compared with a year ago throughout the region.
Detached homes saw the steepest decline with 31.1 per cent fewer sales, followed by townhouses at 30.6 per cent, semi-detached homes at 22.3 per cent and condos at 22 per cent.
Hammell said that while it's important to consider economic challenges when buying or selling a home, the decision should be based more on individual circumstances.
"Everyone's trying to time the market, which is only possible to do in retrospect," she said.
"Decisions shouldn't be made on the headlines. They really should be made on your long-term goals and objectives."
This report by The Canadian Press was first published March 5, 2025.
Sammy Hudes, The Canadian Press
