Why Are Toronto Homebuyers Not Buying?
Thinking about buying a home in Toronto but holding back? You are not alone. As we move through 2025, many potential buyers are hesitant, asking themselves, why are Toronto homebuyers not buying, and for good reason. This post digs into the current Toronto market, explores exactly why are Toronto homebuyers not buying, and outlines what that means for you if you are ready to make a move.
1. Buyer Market in Full Swing
Toronto is firmly in a buyer’s market right now. Listings have surged, sales have definitely slowed, and buyers finally have the upper hand at the negotiating table. Early spring 2025 saw a staggering 27 percent drop in sales compared to the previous period in 2024, while new listings rose 5 percent year‑over‑year . And across Ontario, a Reuters poll found record inventory and some of the steepest price corrections seen recently.
2. What Is Holding Buyers Back? Why Are Toronto Homebuyers Not Buying
Trade‑War Anxiety
Ongoing U.S. tariffs are destabilising confidence in the economy. Buyers are watching global politics and waiting to see if markets take a dive, along weith their investments and savings.
Recession Jitters
Even though a recession hasn’t arrived, the fear of one is feeding caution. Job security worries are enough to reset priorities, especially with large mortgage payments looming and the spectre of large scale layoffs taking place in various impacted industries.
High Mortgage Costs
Despite recent Bank of Canada rate cuts, mortgage rates remain high for many people. Many households still struggle to qualify for loans comfortably and purchase costs like land transfer taxes make it even more expensive to enter the market.
Affordability Standoff
Prices have stayed lofty even while they’ve softened somewhat. A recent Reuters poll expects Toronto prices this year to rise only modestly, and still outpace inflation.
3. The Silver Lining for Homebuyers
When you ask why are Toronto homebuyers not buying, there’s also the upside to consider. Believe it or not, this rare moment also brings opportunity:
- More Inventory = More Options
Buyers can choose freely instead of jumping at limited choices, and sellers are becoming much more flexible. - Price Adjustments
In Spring 2025, 66 percent of homes sold for below asking price, the biggest discount seen since 2013. - Mortgage Rates Easing
The Bank of Canada rate has been slashed to 2.75 %, with five-year fixed mortgage rates among the lowest since 2023 at 3.74 percent insured and 3.84 percent uninsured. - Long-Term Demand Drivers Still Strong
With population growth, wage gains over time, and rebound potential in property values, any economic pause is likely temporary, especially in a thriving metropolis like Toronto.
4. Common Buyer Missteps Right Now
Many mortgage brokers warn that buyers often make three significant errors in this environment:
- Waiting for Rates That May Never Reach Old Lows
- Staying on Sidelines for Minor Price Dips
- Losing Leverage in Slowing Markets
Instead, the experts advise borrowers to revisit their approvals and move while conditions are favourable.
5. What Should You Do If You Want to Buy?
Start with Pre‑Approval
Update your mortgage pre‑approval with current rates and terms. That gives you, and your realtor, confidence and clarity.
Shop with Purpose
Use Internet tools and a top Toronto real estate agent to compare similar homes and evaluate actual fair value, especially with 4 - 6 percent below list prices happening on many units.
Negotiate Smartly
Focus on homes a few percent below asking where sellers are motivated. Incentives like flexible closing dates, upgrades, or closing help may be on the table.
Factor in Everything
Prices may have dropped, but keep your budget conservative, include taxes, maintenance, insurance, and condo fees, if applicable.
Look Long Term
If you plan to stay 5 years or more, a few percent today could translate into meaningful gain later as demand normalizes.
Words of Comfort: Why Are Toronto Homebuyers Not Buying
Yes, buyers are pausing, but you’re not alone in taking caution. But remember, assets are for living, too. If you’re ready financially and emotionally, current conditions may be among the best you’ll see in a long while. Banks and provincial economists all warn: Toronto housing will regain momentum once macro worries fade.
Why are Toronto homebuyers not buying? They’re hesitating because of global uncertainty, saving hang-ups, and higher borrowing costs. But if you are ready to act and thinking long term, this is a rare chance for choice, value, and negotiation power.
Let’s Talk Strategy
Whether you want to buy, sell or just get advice, contact Sean Mayers Real Estate, and benefit from my 16+ years of trusted local knowledge and expert experience to help you make the right moves, in any market.
Reach out for a friendly chat about your goals. Let’s figure out what makes sense for you, not just what the market says.
