Housing price collapse in GTA deepens in September

By Tom Parkin

October 23rd, 2025

BURLINGTON, ON

Housing price collapse in GTA deepens in September

Government policy failed to check the price surge driven by FOMO (Fear of Missing Out) and ultra-low interest rates, and now the resultant price collapse shows no sign of ending.

Average GTA housing unit price down $42k in past year

MLS average benchmark price, Greater Toronto Area

The price of the average housing unit sold in the Greater Toronto Area in September was $9,400 less than the month before, falling to $960,300, according to data from the Canadian Real Estate Association released last week.

Unlike the summers of 2024 or 2023, the 2025 summer buying period did not lift prices as buyers continued to wait, leaving a growing inventory of market listings.

In September, prices continued their usual seasonal down-cycle, but from a lower price base. The flat summer and current stock of listings suggests buyers will continue to look forward to price drops for at least some months to come.

Unchecked boom and resulting bust leaves economic damage

During the 2020-2022 period of ultra-low interest rates, the failure of governments in Ottawa or Queen’s Park to check a massive price bubble allowed the average housing unit purchase price to increase over $450,000. About $320,000 of that price inflation has now been given back.

The damage to Toronto’s economy from the unchecked boom and bust can be seen in stagnant retail sales and thousands upon thousands on owners now facing a mortgage renewal cliff.

Purchases in 2020 made with two per cent mortgage financing are now coming due after a common five year term in an era of four per cent financing. Adding to the insult, the housing may not be sellable for its 2020 purchase price.

Though CMHC has not raised a concern about loan defaults, financing for housing construction has evaporated, leaving building companies idle and trades workers unemployed.

CMHC reports there were only 7,200 Ontario housing unit starts in September, just more than half the 12,500 per month rate required to meet the housing construction target set by the Ford PC government’s own Housing Affordability Task Force.