In September 2025, the Greater Toronto Area (GTA) real estate market showed a clear rebound. Transaction volumes reversed their decline, prices rose in tandem, and market confidence began to gradually recover.
Following two consecutive months of weakness in July and August, the market saw a substantive rebound in September. The number of transactions increased approximately 7% year-over-year and nearly 8% month-over-month, reaching around 5,600 sales. This marked the first month since spring to see simultaneous increases in both sales volume and average price, indicating that buyer hesitancy is beginning to ease and purchase intentions are on the rise.
⏳ Rate Cut Becomes a Key Turning Point for Market Sentiment
On September 17, 2025, the Bank of Canada announced a 25-basis-point cut to its benchmark interest rate, bringing it down to 2.5%. This was the first rate cut in six months and provided strong momentum for the housing market.
For buyers and investors who qualify for financing and are highly sensitive to interest rate changes, the move sent a clear signal: the declining cost of capital is lowering the entry barrier to the market.
The short-term impact of the rate cut was particularly evident. Listings that had previously seen little interest began receiving increased inquiries. Some properties that had remained unsold for extended periods were sold within one to two weeks after the announcement. Buyer activity rose sharply. This series of market responses clearly demonstrates that the rate cut has reignited confidence on both the buyer and seller sides.
Thus, it can be concluded that the September rate cut was a key factor in driving the month’s recovery in transaction volume.
📈 Prices Rebound as Market Enters a Stabilization Phase
With the rebound in sales activity, the average transaction price in the GTA also increased in September, reaching approximately $1.06 million. This represents a month-over-month rise of about 3.6%. Although still 4.7% lower than the same period last year, this price movement indicates early signs of price stabilization.
Overall, the market is transitioning from a phase of accelerated decline to one of gradual bottoming out. The simultaneous stabilization in pricing and recovery in sales volumes is strengthening market confidence in the future.
📊 Listings and Inventory: Ample Supply as Buyers Gradually Return
On the supply side, the number of new listings rose sharply in September to 19,000 units, representing a 37% month-over-month increase. This brought total active listings back to nearly 30,000 units, with overall inventory holding at 5.3 months—still within buyer’s market territory.
Notably, the average days on market increased to 51 days, marking one of the highest levels in recent years. This reflects that although buyers are starting to return, the overall pace of transactions remains relatively slow.
🔍 Looking Ahead: Will Confidence Be Sustained and Drive the Next Phase?
Overall, September’s real estate data reflects a clear recovery trend, with both volume and price increasing. The rebound in sales activity is the most immediate signal of market movement, and the September 17 rate cut appears to have acted as the catalyst reigniting buyer confidence.
As the first rate cut in six months, its tangible impact on the broader economy may take time to materialize. However, its psychological effect was immediate. What we’re seeing is not just a reduction in interest rates, but a shift in sentiment—people are beginning to believe once again: “Perhaps now is the time to consider entering the market.”
The trajectory of the market over the coming months will largely depend on whether this renewed confidence can be sustained. If positive sentiment continues to build—and another rate cut arrives before year-end—this current wave of recovery could be further solidified heading into late 2025.
Published on: 2025-10-09
Read More:
GTA Real Estate Market Watch August 2025
GTA Real Estate Market Watch July 2025
GTA Real Estate Market Watch June 2025
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