Broker sceptical about prospects of a market surge even after sales picked up last month
Toronto posted a surprising uptick in home sales last month, with housing market activity jumping across most home types – but mortgage brokers in the city aren’t getting carried away with that news just yet.
Overall sales across the Greater Toronto Area (GTA) totalled 6,100 in July, an increase of 10.9% compared with the same time last year. But inventory also continued to flood the market, rising by 5.7% in a sign that plenty of sellers are having trouble attracting offers for their homes.
Victor Tran (pictured top), a mortgage agent with Tango Financial and mortgage and real estate expert at Rates.ca, told Canadian Mortgage Professional that he’d been “surprised” by the year-over-year rise in home sales, but said the latest data – released last week by the Toronto Regional Real Estate Board (TRREB) – showed a still-sluggish market.
“If you look at the other stats, values are still down. Inventory is still at some of the highest in over two decades,” he said. “It’s hard to predict what’s going to happen for August and every month going forward but in terms of the sales-to-new-listings ratio and how quickly these properties are being absorbed, that remains really low.”
A new report from RBC Economics indicates that confidence is slowly improving across Canada’s housing markets, with home sales gaining momentum as earlier economic fears begin to fade. https://t.co/3eg1mPrb0S
— Canadian Mortgage Professional Magazine (@CMPmagazine) August 12, 2025
How the coming renewal wave could complicate Toronto’s housing picture
Year to date, sales remain well below the same period in 2024 across all property types, most significantly in a condo market whose woes have been well documented. Condo sales are 17% lower so far in 2025 than the same spell last year in the city centre, and have plunged by 19.8% across the surrounding 905 area.
What’s more, a wave of mortgages is scheduled to come up for renewal in the months ahead – and for borrowers whose mortgage originated five years ago, that means the likelihood of a much higher monthly payment than the rock-bottom lows seen in 2020.
Tran suggested that could potentially bring even more new inventory to an already oversupplied market if homeowners facing financial strain decide to list their properties.
“September is going to be pretty interesting because there’s a lot of renewals coming up – same with October, November, and December,” he said. “We haven’t seen that renewal cliff yet. We haven’t seen that shock in homeowners’ payments yet.
“That will come. Now, will inventory increase because of forced sales, homeowners who can’t handle the higher mortgage rates and payments? We don’t know yet. But I would imagine there’d be a small percentage of homeowners that will be forced to sell because they can’t handle the higher payments.”
Average home prices tumbled yet again across every property type in the GTA last month. In the detached segment, they fell by 5.1%, and posted a 2.3% drop in semi-detached properties. Townhouses saw their average price slip by 7.4%, while condo prices were down by 9.3% in total.
Still, interest rates have stayed stubbornly high in recent months, keeping affordability out of reach for many buyers. The Bank of Canada has opted against cutting rates in recent decisions, meaning variable mortgage rates have remained unchanged, while climbing bond yields have put some upward pressure on fixed rates.
Rate relief soon? Don’t count on it
Buyers holding out hope for rates to fall soon before they make their move could be waiting quite a while longer, according to Tran.
Fixed rates aren’t showing any sign of slipping, while the jury is still out on whether the Bank of Canada will cut rates in its September 17 decision, even after the release of a weaker-than-expected labour market report for last month.
“Fixed rates have been kind of going up and down for the past little while now, but they’re still hovering in the low-to-mid fours,” Tran said. “And I’m afraid they’ll probably stay there for a little while.
“Variable rates are still the same, and it’s hard to say if they’ll drop in September. Personally, I don’t think they will – I don’t think there’s any reason to [cut] now. There’s still a lot of uncertainty in the economy and the trade war in general.”
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