The Review · Vol 09/25 · August 2025
Pumpkin spice & market advice: is real estate crashing or cashing in?
Written by Pawel Parafianowicz, Founder | Broker, Coral Realty Group ·
Sometimes things have to get a lot worse before they get better.
Now that summer is behind us and pumpkin spice season is officially here, it is time to unpack what this fall has in store for real estate. Is the market crashing? Are buyers finally making a comeback? With 98 percent of listings selling below the asking price, the headlines are dramatic and the questions are big. The truth, as always, is a little more complicated, and a lot more interesting.
The economic headlines have been hard to miss. Unemployment hit 7.1 percent in August with 66,000 jobs lost, the highest since the pandemic. Our economy shrank by 1.6 percent in Q2 2025, driven by a 7.5 percent drop in exports, yikes! In Ontario and BC, non-mortgage delinquencies have jumped to levels not seen since the financial crisis. These numbers are not just statistics. They are felt in real households. People are nervous about job security, struggling with debt, and questioning whether it is the right time to make big financial decisions.
Meanwhile, the Bank of Canada (BoC) has been sitting on its hands since March 2025, despite mounting job losses, a contracting economy, and the ongoing weight of tariffs and inflation. The BoC will be forced to make a move now, and markets expect a rate cut on September 17, and consensus is that we will finish the year with rates between 0.50 and 0.75 percent lower than today. Will it work? After all, we’ve seen several rate cuts already and the market has only cooled. At some point the answer has to be yes. We only have to look to Australia, where the central bank has already made three rapid rate cuts this year. The results are early, but buyers returned to the market, open houses are busier, and prices are climbing again in many cities. It shows that with enough easing, confidence can bounce back faster than people expect.
Still, do not expect fireworks this fall. Buyers are cautious with tariffs still on the table, job losses mounting, and overall confidence in short supply. On top of that, unsold spring inventory will spill into fall, likely pushing active listings close to 30,000 again (GTA). Add in the risk of a recession given the recent economic data, and the picture becomes clear. Real estate markets rarely perform well during recessions. The silver lining is that recessions typically bring heavy rate cuts, and with them the chance for a rebound, hopefully by winter or spring.
Buyer's or seller's market?
5.4 months of inventory: an extreme buyer's market.
- Seller's under 2
- Balanced 2–3.5
- Buyer's 3.5–5
- Extreme buyer's 5+
Every August, months of inventory
September highlights
- 01iPro Realty fiasco Roughly $10 million vanished from trust accounts, a stark reminder that consumer protection and stronger oversight are critical. Trust is the foundation of real estate, and this breach impacts the whole industry.
- 02Friday Harbour oversupply With 95 active listings in August, the Friday Harbour collapse is a cautionary tale for niche markets. Too much supply can crush demand.
- 03Non-mortgage delinquencies spike Ontario and BC are seeing levels of non-mortgage delinquencies not seen since the financial crisis. Debt stress is real, and buyers are cautious.
- 04Selling to upsize? Now might be your sweet spot If you’re moving from a starter home into something bigger, this market could work in your favour. Prices have softened across the board, but the gap between entry-level and upsized homes is narrower than usual—meaning your upgrade costs less.
Average price
The Average Home Price declined from July to August, which means we’ve now seen three straight months of declines since the average home price ‘peaked’ for the year in May. Coming off a price of $1,044,576 in July, last month’s average of $992,085 represents a 5.03% decline. For what it’s worth, the same period, July-to-August, in 2023 and 2024 showed similar declines, so the 2025 market seems to be mimicking that of the last two years. Year-over-year, that $992,085 average home price is 3.59% lower than the $1,029,069 set in August of 2024. Prices will improve in September as more luxury sales take place, and May will likely be the peak price for 2025.
Average price
$992,085 ▼ −3.6% vs a year earlier ($1,029,069)
- 2025
- 2024
- 2023
Average price by type
HPI
The Home Price Index provides an apples to apples comparison of home prices in the city and reflects a more accurate change in prices. According to this metric Toronto home prices are down -9.9% (YoY), detached -8.6% (YoY), semi-detached -7.8% (YoY) and condos down -15.2% (YoY).
MLS® Home Price Index
Sales
Sales were a much discussed metric in July, with the media highlighting TRREB’s press release noting a 10.9% year-over-year increase as something to celebrate. However, the momentum slowed in August. Month-over-month, sales activity fell 19.3% from 2,205 in July to 1,779 in August, a drop significantly higher than the 13.5% July-to-August decline in 2024. Year-over-year, the increase over August 2024’s figure was only 3.6%, up from 1,718 to 1,779, showing that the market is stabilizing rather than booming.
Sales by type
New listings
New listings also declined for the third straight month, following the trend seen with average home prices. Of course, you would expect fewer new listings in August compared to ‘prime’ months like May. There were 6,008 new listings in July, and only 4,538 properties listed in August, representing a 24.5% month-over-month decline. This is lower than the 31% decline seen during the same period in 2024. On a year-over-year basis, new listings actually increased, as the 4,538 new listings in August 2025 were 8.6% higher than the 4,177 properties brought to market in August 2024.
New listings by type
Active listings
Active listings in the Greater Toronto Area (GTA) exceeded 30,000 from May to July, peaking at 30,215 in July. By August, inventory dropped 9.0% to 27,495, ending the three-month trend. In Toronto, active listings fell 11.8% month-over-month, from 10,933 in July to 9,644 in August. Year-over-year, August's 9,644 listings were 11.8% higher than the 8,625 recorded in August 2024. The question now is how many terminated listings will return this fall, as last year saw a 16.2% surge from 8,625 in August 2024 to 10,022 in September 2024.
Homes for sale by type
The bigger picture
Homes sold every August, 1996 to 2025
Average condo apartment price, by year
Condo prices are back near 2021 levels.
Our thoughts
Advice for buyers and investors
The days of guaranteed appreciation are over, and the current market is showing just how important cash flow and smart strategy have become. Many households are feeling the squeeze, non-mortgage delinquencies are on the rise, and people are missing credit card payments or delaying mortgage payments. These are tell-tale signs of short-term cash flow challenges, even for people who are otherwise financially stable.
This is where house hacking can make a huge difference. Adding a basement apartment, laneway suite, or rental unit can transform your finances, providing consistent monthly income to ease debt, invest, or simply improve your lifestyle. Adding a basement apartment or laneway is also one of the easiest ways to build instant equity in your property. Imagine $2,000 a month coming in. That is $24,000 in a year, $120,000 in five years, $387,000 in ten years, and over $2.2 million in 25 years if invested at a 9 percent return in the S&P 500. That is how wealth is built, one strategic move at a time.
This is not just theory, it’s something Pawel has done personally. When he purchased an investment property in the Danforth, the first thing he did was add a basement apartment while filing permits to build a laneway suite. He has also added suites to his parents’ home to generate income in retirement, and ensured his sister has one to ease finances during childbearing years. We’ve also helped many families house hack, turning their homes into income-generating assets that relieve financial pressure and build long-term wealth. House hacking can make a meaningful impact for anyone, even higher earners who might not feel cash flow constraints immediately.
In today’s market, where short-term cash flow is king, house hacking is not only one of the safest investment strategies, it is also one of the most rewarding. It allows buyers to leverage their property to generate wealth, reduce risk, and take control of their financial future.
The right property and the right plan make all the difference. Hit reply and we'll show you how house hacking can transform your finances.
Advice for sellers
One of the biggest complaints we hear is the lack of quality listings. At a time when competition is fierce, too many sellers and agents are cutting corners instead of investing in the property. That is a mistake.
A real example. Back in May we pitched on a property where the sellers wanted around $1.3 million. We told them it would take updates to reach that number. Without updates, the reality was closer to 1.1 million. They went with another agent who promised more. Two months later the property is sitting on the market unsold, vacant, and stigmatized. That is the risk of overpromising and under-preparing.
We do things differently. We bring in our trusted crew of contractors who we have worked with for years. They know us, they know our clients, and they know we keep them busy. Because of that relationship they give us excellent work at below-market prices. Whether it is a fresh coat of paint, repairing baseboards, updating flooring, or refinishing cabinets, we make sure our listings stand out. You cannot afford to be just another option.
In today’s market, your listing has to be the top choice to attract buyers. That means investing in your home: replace worn floors, update or paint cabinets, swap out dated countertops, and take care of small cosmetic fixes. These are the costs of doing business in a buyers market, and sellers who follow this advice consistently sell faster and for higher prices.
Source: TRREB. Figures as published in August 2025's data, sent September 9, 2025. Market commentary is general information, not advice for your situation.