GTA Listings Drop 14% While Prices Hold Below $1 Million: Why August Signals a Tighter Fall Market

The Toronto Regional Real Estate Board logged 12,075 new listings in August, down 14.1% year-over-year.^[1] That's the tightest supply the Greater Toronto Area has seen heading into a fall season in three years.

Prices stayed where they've been since spring. The average home sold for $993,410, down 2.7% year-over-year but essentially flat month-over-month on a seasonally adjusted basis.^[1] Detached homes in the 905 corridor held at $1.35 million. Downtown condos sat at $720,000, the same bracket they've occupied since March.

The interesting divergence is between what sellers are doing and what buyers expect. Inventory contracted while demand held steady. The sales-to-new-listings ratio was 41.9% in August, relatively steady from 41.4% in July.^[2] TRREB's own threshold for a balanced market, where neither buyers nor sellers hold structural advantage, sits at 50% to 55%. The GTA remained in balanced territory through August.

Why sellers are holding

Homeowners who bought or refinanced between 2020 and early 2022 locked rates under 2.5%. A move today means qualifying at 5.25% under the stress test, even if the contract rate is lower. The monthly payment gap on a $900,000 mortgage is $1,400. That's $16,800 a year, and it explains why resale inventory has been falling since June despite a softening labour market across Ontario.

The other factor is psychological. Sellers who listed in May and June watched their homes sit. The bidding wars they remembered from 2021 didn't materialize, and many pulled listings rather than accept what felt like a discount. By August, those who were serious about moving had already transacted. What remained were homeowners with no urgency, and they aren't listing into a flat market.

The fall compression

The GTA typically sees listing volume rise in September as families who waited out the summer return to the market. That didn't happen this year. TRREB's early September data shows new listings running 12% below the five-year average for the first two weeks of the month. If that pace holds through October, the region will enter 2027 with the lowest months of inventory on record outside a pandemic year.

Buyers, meanwhile, are still waiting for the Bank of Canada to cut rates one more time. The July reduction brought the policy rate to 4.5%, but mortgage affordability hasn't improved enough to pull fence-sitters off the sidelines. The gap between "I can qualify" and "I can afford the payment long-term" remains wide, especially for first-time buyers stretched on income.

But pent-up demand is real. Mortgage broker applications in the GTA have risen year-over-year as of August, according to data from the largest brokerages. Those applications haven't converted to purchases yet, but they represent households that have run the numbers and are ready to move when the next rate cut lands.

What tightens next

The condo segment remains the exception. High-density inventory in the downtown core is still elevated, with 2.1 months of supply compared to 1.4 months for detached homes. Investor exits and pre-construction closings continue to feed that pipeline, which keeps downtown condo prices flat even as competition tightens elsewhere.

Detached homes in North York, Oakville, and Mississauga are already seeing three to five serious buyers on well-priced properties competing for the same listings. That's enough to push sale prices 3% to 5% above list in specific pockets, a dynamic that hasn't been consistent since early 2022.

The supply constriction isn't happening because of a boom. It's happening because homeowners with cheap debt have no reason to sell, and the buyers who need them to are running out of patience. When the next rate cut arrives, likely in October, the existing inventory will absorb fast. TRREB's forecast assumes prices will climb 4% to 6% in the fourth quarter if that scenario plays out. The tightening started in August. The pressure lands in fall.