Home prices could be on the rise again in Ontario: report

Home prices have declined from peak highs in early 2022 but a new report suggests they are on the rise again in Ontario and across Canada.

The aggregate price of a home in Canada increased by 0.3 per cent year-over-year to $826,400 in the second quarter of 2025, according to the Royal LePage House Price Survey and Market Forecast released Tuesday. On a quarter-over-quarter basis, the national aggregate home price decreased by 0.4 per cent, the report found.

Typically one of the busiest times of year for home buying and selling, the spring market was noticeably subdued in several regions this year, namely in Toronto and Vancouver, two of the country’s largest and most expensive markets, Royal LePage said in the report.

Homebuyers continued to take a cautious, wait-and-see approach, Royal LePage said. The tariff threat in the U.S., along with the Bank of Canada lending rate at 2.75 per cent may be behind the slow market. Sellers, on the other hand, continue to actively list their homes for sale despite lower-than-normal activity.

“Homebuyers approached the start of the 2025 spring market with hesitation, dampening what is typically the busiest season on the real estate calendar,” said Phil Soper, president and CEO of Royal LePage. “With trade disputes, a federal election, and international conflicts dominating headlines through the first half of the year, many prospective buyers chose to wait.”

Soper added that June’s robust employment report may help rebuild confidence and bring more buyers off the sidelines in the months ahead.

The spring slowdown in activity was most evident in markets across Ontario and British Columbia, where rising inventory and stagnant demand have persisted for several months. Notably, activity began to pick up in the final weeks of the quarter – a break from the usual seasonal slowdown and an early signal that market momentum may be shifting, the report found.

Toronto posted a strong rebound in activity from mid-May through June, while sales activity in Vancouver stabilized in the final month of the quarter – early signs that confidence is returning, according to the report.

The combination of salaries increasing while borrowing rates decline and home prices stagnate has resulted in improved affordability in Canada’s housing market; particularly in Ontario and British Columbia.

Canada’s aggregate home price has declined 3.6 per cent from its peak high in early 2022, the report found. At the same time, wages have steadily increased. Between April 2022 and April 2025, national average weekly earnings have risen 11.8 per cent.

The aggregate price of a home in the Greater Toronto Area decreased three per cent year over year to $1,155,300 in the second quarter of 2025. On a quarterly basis, the aggregate price of a home in the GTA remained relatively flat, increasing 0.8 per cent.

Broken out by housing type, the median price of a single-family detached home decreased 1.2 per cent year over year to $1,448,700 in the second quarter of 2025, while the median price of a condominium decreased 5.6 per cent to $699,700 during the same period.

“The typical spring surge in activity failed to materialize this year, resulting in more of a blip than a boom in the Toronto housing market the last few months. That said, we’ve seen a notable increase in requests for showings in recent weeks, indicating that buyers are actively browsing, even if they’re still hesitant to commit,” said Shawn Zigelstein, broker and leader of Team Zold, Royal LePage Your Community Realty.

According to the Toronto Regional Real Estate Board, home sales in June were down 2.4 per cent compared to the same period last year. However, on a seasonally adjusted basis, sales rose in June compared to May 2025, indicating a modest month-over-month improvement in activity.

The condo market remains depressed, further weighed down by a steady stream of new construction completions that continue to add to existing supply, the report said.

Royal LePage is forecasting that the aggregate price of a home in the Greater Toronto Area will increase two per cent in the fourth quarter of 2025, compared to the same quarter last year. The previous forecast has been revised down modestly to reflect current market conditions.

Across Canada, Soper said there are signs of renewed confidence and a stronger housing market in the fall is possible.

Royal LePage is forecasting that the aggregate price of a home in Canada will increase 3.5 per cent in the fourth quarter of 2025, compared to the same quarter last year. The previous forecast has been revised down modestly to reflect slower-than-usual sales activity in Ontario and British Columbia.

“Given the backdrop of global economic uncertainty and cautious sentiment at home, we expect steady but uneven progress across regional markets this summer, rather than a broad-based rally,” Soper said. “If optimism continues to build and Canadians feel more secure about the economy – and our ability to successfully manage the country’s relationship with the United States – we could see a more confident and active housing market emerge later this year.”

See the full report here.