Toronto Has 5 Months of Inventory: What That Really Means for Buyers and Sellers

Toronto NeighbourhoodsToronto Real Estate Market

Jun 9

If you’re still thinking like it’s 2021, the market is going to catch you off guard. Today’s buyers are cautious, and sellers need more than a “For Sale” sign and wishful thinking.

Remember when listings were flying off the market in days and every offer came with a side of panic? Yeah, those days are gone (for now).

Right now in Toronto, homes are sitting longer, buyers are hesitating, and listings are quietly stacking up. In fact, we’ve hit nearly 5 months of inventory, something we almost never see in this city.

This isn’t just a boring stat. It’s a flashing signal that the balance in our market has shifted, and whether you’re buying, selling, or waiting it out, it matters.

Let’s break down what 5 months of inventory really means (with no jargon), how rare this is for Toronto, and what smart buyers and sellers should be doing right now.

📊 What Is “Months of Inventory,” and Why Is 5 Months a Big Deal?

Months of Inventory (MOI) measures how long it would take to sell all the homes currently on the market if no new properties were listed. It’s calculated like this:

MOI = Active Listings ÷ Number of Sales

The higher the number, the more listings there are relative to buyers, and the more the market tilts in favour of buyers.

In Toronto this is a big deal. For over a decade, Toronto has operated in what’s essentially permanent seller’s market mode. We’re used to seeing 1–3 months of inventory, and anything more than that has been a temporary blip (think early 2020 lockdowns). But May 2025 tells a different story.

Here’s what we’re looking at:

Inventory reached 4.96 months — just shy of the peak we saw last fall, and still one of the highest levels in over a decade
Active listings rose 42% year-over-year (from 21,760 to 30,964)
Sales dropped 11% year-over-year (from 7,013 to 6,244)
Average days on market increased from 19 to 25
Average prices slipped slightly (from $1,165,691 to $1,120,879)

🛍️ For Buyers: More Choice, More Power, But Less Urgency

If you’ve been waiting for a market where you can actually think before making an offer, this is your time.

There’s more selection than we’ve seen in years, sellers are negotiating again, and you finally have a chance to shop without feeling like you’re being chased. Buyers I’m working with now have 8–10 solid listings to choose from in their budget… unheard of even a year ago.

What’s working in your favour:

More inventory means more options
Conditions and negotiation are back on the table
Higher days on market gives you room to breathe

But don’t get too comfortable. The best homes, the ones priced properly and presented well, are still moving fast. And if interest rates drop later this year, buyer competition could come roaring back.

Buy when the market is calm, not when it’s crowded.

🏡 For Sellers: Strategy Over Wishful Thinking

Let’s be honest — it’s not 2021 anymore. You can’t list high, skip staging, and expect a lineup. In a 5-month inventory market, the sellers who succeed are the ones who adapt.

Here’s what works now:

Smart pricing based on current data
Strong presentation that makes your listing pop
Marketing that actually reaches your target buyers

And yes, homes are still selling. The ones that are priced right, staged beautifully, and strategically marketed are the ones that stand a real chance. But even then, some listings are facing challenges that have nothing to do with the effort behind them — like location quirks or cautious buyer sentiment. In this kind of market, perfection doesn’t always guarantee speed.

💡 What You Can Do Right Now?

Buyers: Get pre-approved while rates are still high and use the current lull to negotiate on your terms
Sellers: Ask your agent (hi!) to build a pricing strategy based on what’s happening now — not six months ago
Investors: Watch multi-unit listings — rent prices are holding strong and some sellers are growing impatient

🔮 What Happens Next?

We skipped the spring market heat and slid straight into the slower summer energy. But this could be the calm before the storm.

If the Bank of Canada cuts rates later this year, we could see buyer activity bounce back quickly. That would shrink inventory and push prices upward again.

But here’s the flip side. If buyers continue to hesitate and listings keep piling up, Toronto could shift into a full-blown buyer’s market by fall, something we haven’t truly seen in over a decade. That would give buyers more leverage, but could also push sellers toward bigger price reductions.

Timing your move now gives you options. Waiting could tilt the playing field further.