Toronto Market Snapshot: November 2025
The Toronto housing market has shifted to balanced conditions, offering buyers more opportunities than in recent years. Prices are down across all property types, creating improved affordability—though challenges remain.
Buying a home in Toronto is one of the biggest financial decisions you'll ever make—and in 2026, understanding what you can truly afford is more important than ever. With the Toronto housing market experiencing significant shifts, including price corrections and changing mortgage rates, buyers have more opportunities than in recent years, but affordability remains a critical challenge.
Whether you're a first-time buyer wondering if homeownership is within reach, or a move-up buyer looking to upgrade, this comprehensive guide will help you understand the real costs of buying in Toronto, calculate your budget realistically, and identify neighborhoods that match your financial situation.
Understanding Toronto's Housing Market in 2026
Current Market Overview
The Toronto real estate market has entered a balanced phase that favors buyers—a welcome change from the seller-dominated conditions of previous years. As of November 2025, the Greater Toronto Area (GTA) saw an average selling price of $1,039,458, representing a 6.4% decrease year-over-year. Within the City of Toronto specifically, the average price was $1,036,362, down 4.1% from the previous year.
This cooling trend has been consistent throughout 2025, with prices declining across all property types. The market now offers buyers more choice, with active listings 12.5% higher than a year earlier and properties staying on the market for an average of 56 days—up from 49 days in 2024. The sales-to-new-listings ratio of 45% confirms balanced market conditions, meaning neither buyers nor sellers have an overwhelming advantage.
Price Trends and What They Mean for Buyers
The price correction in Toronto's housing market is driven primarily by persistently high borrowing costs. Despite the Bank of Canada holding its policy rate at 2.25% as of December 2025, mortgage rates remain elevated compared to historical lows. Five-year fixed mortgage rates are hovering around 3.94%, while variable rates are near 3.45%.
For buyers, this means two things: first, you have more negotiating power and time to make decisions without the pressure of bidding wars. Second, qualifying for a mortgage remains challenging due to the federal stress test, which requires you to prove you can afford payments at a rate of 5.25% or your contract rate plus 2%—whichever is higher.
The good news? Prices have come down from their peaks, and the market is expected to stabilize through 2026, giving you the opportunity to enter the market without the fear of immediate price spikes.
The Real Numbers: What Does It Cost to Buy in Toronto?
Average Home Prices by Property Type
Understanding the price landscape across different property types is essential for setting realistic expectations. As of November 2025, here's what you can expect to pay in the GTA:
For first-time buyers, condominiums represent the most accessible entry point into Toronto's housing market. The condo segment has seen particularly strong activity in the sub-$500,000 range, with resale transactions for units under this threshold jumping 47% in the first half of 2025.
Income Requirements and Affordability Gap
Here's where the affordability challenge becomes stark. Based on an average home price of approximately $957,000 and current mortgage rates, a household would need an annual income between $172,240 and $202,436 to qualify for a mortgage with a 20% down payment.
This required income is more than double Toronto's median household income of approximately $98,000, creating a significant affordability gap. This disconnect between what people earn and what homes cost is the primary reason why sales activity has declined 15.8% year-over-year.
Condo Affordability Example
For a more affordable condo priced at $630,000:
- • With 20% down ($126,000): Required income ~$113,000-$130,000
- • With 10% down ($63,000): Required income ~$125,000-$145,000
- • Note: Less than 20% down requires mortgage default insurance ($15,000-$25,000)
Down Payment Considerations
Your down payment significantly impacts both your mortgage qualification and monthly costs:
- Minimum 5% for homes under $500,000
- 5% on first $500,000 + 10% on remaining amount for homes $500,000-$999,999
- Minimum 20% for homes $1 million and above
For example, on a $630,000 condo, a 20% down payment would be $126,000, while the minimum required would be $38,000 (5% on first $500,000 + 10% on remaining $130,000). However, with less than 20% down, you'll need to pay for mortgage default insurance, which can add $15,000-$25,000 to your total costs.
Calculating Your Home Buying Budget
The 28/36 Rule and Debt Ratios
Lenders use two key ratios to determine how much you can afford:
Gross Debt Service (GDS) Ratio
Your housing costs (mortgage, property taxes, heating, and 50% of condo fees) should not exceed 28-32% of your gross monthly income.
Total Debt Service (TDS) Ratio
Your total debt payments (housing costs plus car loans, credit cards, student loans) should not exceed 36-40% of your gross monthly income.
Example Calculation
If your household earns $120,000 annually ($10,000/month):
- • Maximum housing costs: $2,800-$3,200/month
- • Maximum total debt payments: $3,600-$4,000/month
Mortgage Stress Test Requirements
The federal mortgage stress test is designed to ensure you can still afford your mortgage if rates increase. You must qualify at the higher of:
- 5.25%, or
- Your contract rate plus 2%
With current 5-year fixed rates around 3.94%, you would need to qualify at approximately 5.94%. This effectively reduces your purchasing power by 15-20% compared to qualifying at your actual rate.
Hidden Costs Beyond the Purchase Price
Many first-time buyers underestimate the additional costs of homeownership in Toronto:
- Land Transfer Tax: In Toronto, you pay both provincial and municipal. On a $630,000 condo, expect ~$16,950 (first-time buyers receive rebates up to $12,950)
- Legal Fees: $1,500-$3,000
- Home Inspection: $400-$800
- Title Insurance: $200-$400
- Moving Costs: $500-$2,000
- Immediate Repairs/Renovations: Budget 1-3% of purchase price
For a $630,000 condo purchase, budget an additional $15,000-$25,000 beyond your down payment for closing costs and immediate expenses.
Toronto Neighborhoods by Price Point
Entry-Level Options: Condos Under $650K
For buyers with household incomes in the $110,000-$140,000 range, condominiums offer the most accessible entry points:
Scarborough
One-bedroom condos starting around $450,000-$550,000 near Scarborough Town Centre with good transit access.
North York
Units around Sheppard and Finch Avenues range from $500,000-$600,000 with excellent transit connections.
Etobicoke
Neighborhoods like Islington offer condos in the $500,000-$650,000 range with parks and waterfront access.
Downtown Core
Studio and one-bedroom units in older buildings range from $550,000-$650,000 with maximum walkability.
Mid-Range Markets: $650K-$1M
This price range opens up larger condos, townhouses, and semi-detached homes, requiring household incomes of $145,000-$225,000:
Midtown
Two-bedroom condos near Yonge and Eglinton range from $700,000-$900,000 with excellent transit access.
East York
Townhouses and semis in Danforth Village range from $800,000-$950,000 with good schools.
High Park Area
Two-bedroom condos and townhouses range from $750,000-$950,000 with park and subway access.
Leslieville/Riverdale
Townhouses and semis range from $850,000-$1,000,000 with walkable main streets.
Premium Neighborhoods: $1M+
For buyers with household incomes exceeding $225,000:
The Beaches
Detached homes start at $1.3 million with lakefront access.
Rosedale/Forest Hill
Prestigious neighborhoods with detached homes starting at $2 million.
King West/Liberty Village
Luxury condos and townhouses range from $1-2 million+.
Leaside
Family-friendly with detached homes from $1.5-2.5 million and excellent schools.
Smart Strategies for Toronto Home Buyers
First-Time Buyer Programs and Incentives
Take advantage of programs designed to help first-time buyers:
- Home Buyers' Plan (HBP): Withdraw up to $35,000 from your RRSP ($70,000 for couples) for a down payment, which you repay over 15 years.
- Land Transfer Tax Rebates: First-time buyers in Toronto can receive up to $4,475 in municipal rebate and up to $4,000 in provincial rebate.
- FHSA (First Home Savings Account): Contribute up to $8,000 annually (lifetime maximum $40,000) to this tax-free account specifically for first-time home purchases.
Timing Your Purchase in a Balanced Market
The current balanced market conditions offer strategic advantages:
- Take Your Time: With 56 days average time on market, you don't need to rush decisions. Conduct thorough inspections and due diligence.
- Negotiate Effectively: With homes selling at 97% of asking price on average, there's room for negotiation. Don't be afraid to make offers below asking price, especially for properties listed 30+ days.
- Watch for Seasonal Patterns: Spring typically sees increased activity, while late fall and winter often offer less competition and more motivated sellers.
- Monitor Rate Trends: With mortgage rates expected to remain relatively stable through early 2026, you have time to shop for the best rate and terms.
Working with the Right Real Estate Professional
A knowledgeable real estate agent who understands Toronto's diverse neighborhoods can be invaluable:
- • Look for agents with specific expertise in your target neighborhoods
- • Ask about their experience with first-time buyers if applicable
- • Ensure they understand your budget constraints and won't push you beyond your means
- • Request references from recent clients in similar situations
How HouseIndex Helps You Find Affordable Homes
At HouseIndex, we understand that affordability is the top concern for Toronto home buyers. Our platform is designed to help you find homes that match your budget and needs:
Advanced Search Filters
Easily filter homes by price range, property type, neighborhood, and specific features. Our intuitive interface lets you quickly identify properties within your budget.
Neighborhood Insights
Access detailed information about Toronto neighborhoods, including average prices, school ratings, transit access, and local amenities. Make informed decisions about where your budget goes furthest.
Real-Time MLS Listings
Browse the most current listings directly from the Toronto Regional Real Estate Board MLS system. See new properties as soon as they hit the market.
Mortgage Calculator Tools
Use our built-in affordability tools to estimate your monthly payments, understand the impact of different down payment amounts, and see how rate changes affect affordability.
Property Valuation
Curious about what your current home is worth or want to analyze a potential purchase? Upload property details to get instant market insights and valuation estimates.
Start your search today by browsing homes for sale or explore neighborhoods to find the area that fits your lifestyle and budget.
Frequently Asked Questions
How much income do I need to buy a home in Toronto?
For an average-priced home in Toronto (around $1,036,362 as of November 2025), you would need a household income between $172,240 and $202,436 with a 20% down payment. However, for more affordable condos in the $630,000 range, a household income of $113,000-$130,000 with 20% down would typically qualify. The exact amount depends on your down payment size, other debts, property taxes, and current mortgage rates. Remember that lenders will stress test you at a higher rate (currently 5.25% or your contract rate plus 2%), which reduces your purchasing power by 15-20%.
What is the most affordable type of home to buy in Toronto?
Condominium apartments are the most affordable entry point into Toronto's housing market, with an average price of $630,739 as of November 2025. The condo market has seen particularly strong activity for units under $500,000, especially in neighborhoods like Scarborough, North York, and Etobicoke. One-bedroom condos in these areas can be found starting around $450,000-$550,000. For comparison, townhouses average $825,979, semi-detached homes average $897,092, and detached homes average $1,465,654 in the GTA.
Is now a good time to buy a home in Toronto?
Yes, 2026 presents favorable conditions for Toronto home buyers. The market has shifted to balanced conditions after years of seller dominance, with prices down 4-6% year-over-year across all property types. Buyers now have more choice (active listings up 12.5%), more time to make decisions (average 56 days on market), and more negotiating power (homes selling at 97% of asking price). While mortgage rates remain elevated, they're expected to stabilize through early 2026. The key is ensuring you can comfortably afford the home you're buying and aren't stretching beyond your means. The pressure of bidding wars has eased, allowing for more thoughtful, strategic purchases.
What neighborhoods in Toronto are best for first-time buyers?
For first-time buyers, the best neighborhoods balance affordability with access to transit, amenities, and future growth potential. Scarborough offers the most affordable condos ($450,000-$550,000) with improving transit infrastructure. North York along the Yonge and Sheppard subway lines provides good value ($500,000-$650,000 for condos) with established amenities. Etobicoke neighborhoods like Islington offer waterfront access and parks at reasonable prices. East York areas like Danforth Village provide townhouses and semis in the $800,000-$950,000 range with strong community character. For those wanting to be downtown, older condo buildings in the core offer one-bedrooms in the $550,000-$650,000 range with maximum walkability.
How much should I save for a down payment in Toronto?
Your down payment requirement depends on the home price. For homes under $500,000, the minimum is 5%. For homes $500,000-$999,999, you need 5% on the first $500,000 plus 10% on the remaining amount. For homes $1 million and above, the minimum is 20%. However, putting down at least 20% is advantageous because it eliminates the need for mortgage default insurance (which costs 2.8-4% of the mortgage amount) and typically qualifies you for better mortgage rates. For a $630,000 condo, a 20% down payment would be $126,000, while the minimum would be $38,000. Beyond the down payment, budget an additional $15,000-$25,000 for closing costs including land transfer taxes, legal fees, inspections, and moving expenses.
What is the mortgage stress test and how does it affect me?
The federal mortgage stress test requires you to qualify for a mortgage at a rate higher than what you'll actually pay. You must prove you can afford payments at the higher of either 5.25% or your contract rate plus 2%. With current 5-year fixed rates around 3.94%, you would need to qualify at approximately 5.94%. This stress test effectively reduces your purchasing power by 15-20% compared to qualifying at your actual rate. For example, if you could afford a $700,000 home at 3.94%, the stress test might limit you to a $580,000-$600,000 home. While this seems restrictive, it's designed to protect you from financial hardship if rates increase during your mortgage term. Work with a mortgage broker to understand exactly how the stress test affects your specific situation.