Home prices across the GTA continued to soften in July, with freehold homes seeing some of the biggest monthly declines. At the same time, many homeowners appear to be hitting pause rather than accepting today’s market prices.
Buyers continue to have the upper hand. They still have plenty of choice, room to negotiate, and little pressure to rush. But instead of cutting prices further, more sellers seem to be deciding that if they can’t get the price they want, they’ll simply wait.
According to the Toronto Regional Real Estate Board (TRREB), the average GTA home sold for $1,003,956 in July. That’s down 4.5% from July 2025 and $54,972 lower than June’s average of $1,058,928, a 5.2% drop in just one month.
The monthly average prices should always be viewed with some caution. Seasonal trends and the mix of homes sold can have a significant impact on the average sale price. July and August are traditionally slower months, particularly for larger family homes, and when fewer luxury properties sell, the overall average can fall more sharply.
Even with those seasonal factors, the broader trend remains the same. TRREB’s benchmark home price was 4.6% lower than a year ago, reinforcing that prices across the GTA are still moving lower. While July’s average may exaggerate the pace of the decline, it doesn’t change the overall picture. The market is still searching for a stable bottom.
Sales activity remained relatively steady rather than falling off a cliff. There were 5,995 home sales across the GTA in July, just 0.9% fewer than during the same month last year. However, buyers continued to take their time, and sellers generally had to be more flexible to get deals done.
The average property spent 32 days on the market compared to 29 a month ago, while homes sold for an average of 97% of their most recent asking price. Those aren’t signs of a market in distress, but they do reflect one where buyers continue to hold the negotiating advantage.
Detached homes experienced some of the largest price declines. In the 905 area, the average detached home sold for $1,207,295 in July, down from $1,272,842 in June. That’s a monthly decline of $65,547, or 5.1%.
The drop was even larger within the City of Toronto, where the average detached price fell by roughly $100,000, or 6.1%, compared to June. However, the 905 numbers are likely to provide a better indication of overall market conditions because they were based on 2,098 detached sales versus 691 in Toronto.
Some of that monthly decline can also be attributed to normal seasonal patterns. Families looking to purchase larger homes often aim to buy during the spring so they can move before the new school year begins. During the summer months, fewer high-priced homes tend to sell, which can pull down average prices even if the value of individual properties hasn’t fallen by the same amount.
Even after recent price adjustments, purchasing a home around $1.2 million still requires considerable income, equity, and the ability to comfortably carry today’s mortgage payments. Many move-up buyers also need to sell their current home before purchasing another.
That creates a chain reaction within the housing market. A first-time buyer purchases an entry-level home, allowing that seller to move into a larger property, which then allows another homeowner to move again. When fewer first-time buyers complete purchases, that chain begins to slow.
Teranet (a leader in data solutions) has reported that first-time buyers now account for a larger share of the market than ever before. Overall sales remain near record lows, meaning the total number of first-time buyers is still below historical levels.
Perhaps the biggest story in July wasn’t the decline in prices, it was what sellers chose to do. New listings dropped 17.8% year-over-year to 14,484, while active listings declined 12.1% to 26,098. By comparison, sales were only down 0.9%.
That means supply is shrinking much faster than demand. Active listings have now been below last year’s levels for 3 months in a row, suggesting more homeowners are deciding to step aside instead of competing in today’s market.
Buyers still have plenty of inventory to choose from and remain in a strong negotiating position. But it’s important to understand why inventory is tightening.
TRREB’s Market Watch report doesn’t track cancelled or suspended listings, but Habistat, found on PropTx, reports that while sellers are cancelling fewer listings than they did last year, cancellations are still occurring at the second-fastest pace on record.
Together with the sharp decline in both new and active listings, it suggests that many homeowners are choosing to postpone selling, remove listings that aren’t attracting offers, or avoid listing altogether after seeing what comparable homes are selling for.
Buyers haven’t suddenly become more confident, nor has affordability improved. Prices are still being set by completed sales, and many of those transactions continue to establish lower comparable values.
As we head into the fall market, the question is which side blinks first. Sellers may feel encouraged by declining inventory and become more confident holding their asking prices. Buyers, on the other hand, will continue pointing to lower sale prices, longer selling times, and ongoing affordability challenges as reasons to negotiate.
First, active listings need to continue trending lower. One month of declining inventory could simply reflect seasonal patterns, but several months of shrinking supply would indicate sellers are genuinely pulling back.
A continued slowdown in new listings could help keep inventory in check and limit further price adjustments. However, if the supply of homes levels off while buyer demand remains modest, July’s sale prices may influence how future listings are priced.