The Bibby Group | July 2025 Newsletter

The Toronto Real Estate Board released its June Market Watch last week. While it revealed similar data
to May, a notable shift has emerged in Toronto’s marketplace. Over the past few years, most
condominium data showed modest price fluctuations—typically in the range of 1% to 4%. However, the
rapid cycle of price reductions we are experiencing in Toronto has been transformative.
Recent data suggests that year-over-year condominium prices in Central Toronto are down 8.4%, sales
have declined by 21%, and active supply is up 14%. While single-family freehold prices have historically
remained more resilient during market adjustments, even the Central Toronto detached home segment
has seen prices fall by 5.6%, with sales down 11% and inventory up 35%.

Not surprisingly, this market fragility has led many purchasers to question the timing of their
transactions. Several concerns are fueling buyer caution—chief among them: whether prices will
continue to decline, whether inventory will keep rising, the state of the Canadian economy and our
trade relationship with the United States, and increasing geopolitical tensions.

Still, an encouraging trend is beginning to surface. More prospective buyers are stepping off the
sidelines, intrigued by recent price adjustments. Activity is slowly picking up as buyers and sellers begin
to find common ground. In recent weeks, we’ve received offers on numerous listings. And while only a
handful have sold, it’s a positive sign that conversations are happening.

Hopes were high among buyers and brokers for a rate cut on June 4. However, the Bank of Canada held
its key benchmark rate at 2.75% as it continues to assess the impact of trade policy uncertainty with the
U.S. This marked the second consecutive hold by the central bank. Before the next decision at the end of
this month, the BoC will have two additional months of inflation data to consider. Governor Tiff
Macklem has suggested that rate cuts are likely on the horizon—though he stopped short of making any
firm commitment.

Many past clients have reached out recently to get a grasp of current condo prices. A helpful reference
point has been the 2021–2022 market, working backwards from there. Price flexibility has increasingly
become a necessary strategy for most sellers. Interestingly, we’re now hearing from 2019 buyers—those
who purchased pre-pandemic—who are seeing resale prices for similar units in their buildings fall below
what they originally paid. While I still use early pandemic purchases as the benchmark for whether a unit
has appreciated, in some cases we’re seeing values roll back more than six years, which is a sobering
statistic.

Understandably, many sellers still hope their own property is immune to market forces—whether due to
a beautiful terrace, unobstructed views, or premium finishes. But the writing is on the wall: it’s no longer
debatable whether prices are flat, slightly up, or slightly down—prices are down. The real question is, by
how much?

The answer depends on a few key factors: product type (investor-dominant vs. owner-occupied),
neighbourhood, and the property's individual features. In a recent conversation with Carolyn Ireland of The Globe and Mail, we noted that buyers are currently “looking for blood.” However, surprisingly, most of our transactions don’t reek of desperation. Sellers still determine what they’re willing to accept, and many of the so-called “deals” are found in buildings or areas that end-users don’t want to live in.

Unfortunately, the struggling downtown high-rise pre-construction segment is often lumped into the
broader condo market. Many of the buildings facing the greatest “distress” are those with a highpercentage of renters and little owner occupancy. It would be helpful to more clearly assess how much quality inventory is truly available—because there are exceptional opportunities out there.

So, the crystal ball question: when will the market turn around? In my view, prices won’t increase in the
short to mid-term. In fact, I prefer the current summer market. As I noted in The Globe and Mail article,
we’re likely to see another bump in supply after Labour Day, as is typical for the season.
The recent price reductions are beginning to work. The end of June and early July have felt more
productive than the 30 days prior. Fortunately, most of our business involves end-user products in
buildings with low turnover. Many of our clients have held their properties long-term and can make
decisions that best serve their needs.

Timing an exit in an uncertain market is never easy. But sellers who are reasonable can still achieve
success—and many have seen solid performance over the long term. At the time of writing, we have five
conditional sales pending from the past week, which is a welcome change.
My advice? If you need to sell, manage your expectations; if you bought in recent years or don’t need to
move in 2025, sit tight and observe. The tides will turn—it’s just a matter of when.