Years of bidding wars and record-breaking sales *may* be coming to an end for the Canadian real estate market. Toronto is seeing particularly notable changes in terms of both price and pace. With business as usual set to shift, every Airbnb entrepreneur needs to take November's outlook into consideration in planning their long-term strategy for short-term rentals. Let's dive into the most important takeaways.
The Strength Is Still There
We should preface all of the coming statements with a recognition that any use of the word 'slow' is by Toronto standards. Growth persists in many areas of the market - it's just not as pertinent. RBC notes modest improvements in home resales between September and August 2025 in Winnipeg, Regina, and Toronto. Most other major centers, namely Vancouver, Calgary, Edmonton, Saskatoon, Hamilton, Ottawa, Montreal, and Halifax, are seeing downright declines.
In other words, recovery is still uneven and fragile, so take any broad predictions with a grain of salt. The real estate landscape varies dramatically from city to city, and what's true for Toronto's short-term rental market may not apply in Vancouver or Montreal. Airbnb hosts need to focus on hyper-local data rather than national trends when making investment decisions. Overall, though, we can say speed is dwindling.
What the Numbers Say
Overall, November marks a transitional phase for Toronto’s housing market—one that favors buyers and rewards short-term rental owners who adapt proactively to shifting supply, pricing, and demand trends.
Toronto’s housing market continues its gradual rebalancing as prices edge lower and buyer sentiment strengthens. After a prolonged cooling period, the city’s MLS Home Price Index sits around $971,500 as of September, dipping another half percent monthly and more than five percent over the past year. Prices now stand roughly a quarter below their 2022 peak, helping to restore some measure of affordability.
Stock levels remain at multi-decade highs, creating a strongly competitive environment among sellers and giving buyers increased leverage during negotiations. Despite these downward price pressures, signs of renewed market participation are surfacing. Home resales have jumped 22 percent over the last four months, suggesting improving confidence as prices stabilize. That said, affordability constraints and cautious lending conditions mean a full market rebound is still distant, with uneven progress expected through late fall and into winter.
What the Numbers Mean
For short-term rental property owners, Toronto’s softer pricing climate offers both opportunity and caution:
- Acquisition Advantage: Lower home values may present buyers with a window to expand short-term rental portfolios at more favorable entry points, especially in neighborhoods with strong tourism recovery.
- Refinancing Leverage: Owners considering refinancing may benefit from stabilizing interest rate expectations, though reduced equity from declining prices could limit options for highly leveraged properties.
- Demand Shifts: As ownership affordability improves slightly, some renters may transition to purchasing homes, potentially tempering mid-range rental demand. However, visitor-driven stays and downtown bookings remain resilient as tourism and event activity resume.
- Competitive Adjustments: With more investors exploring entry at lower prices, the rental landscape may see a modest increase in listings, driving hosts to refine pricing strategies and emphasize high-quality guest experiences.
How October 2025 Interest Rate Cut Affects Market Outlook
On Wednesday, October 29th, the Bank of Canada (BOC) fulfilled analysts' expectations by cutting its key lending rate to 2.25%. That's down a quarter point from the previous 2.5%. What the latest outlook means to you as an Airbnb entrepreneur depends on your current situation and long-term plans.
Buyers are happy because cheaper borrowing costs mean more favorable mortgage terms, which could inject fresh demand into a cooling market. However, sellers face a different calculus. Lower rates typically stimulate buyer activity, but they also signal the central bank's concerns about economic growth. This creates a delicate balance: increased affordability may bring buyers back to the table, but economic uncertainty could keep them cautious about major purchases.
For the short-term rental market specifically, this rate cut presents both opportunities and challenges. Existing property owners with variable-rate mortgages will see immediate relief in their monthly carrying costs, improving cash flow and potentially boosting profitability. Those considering new acquisitions now face more attractive financing terms, making previously marginal investment properties potentially viable.
November now rolls on at a pace some of us aren't accustomed to. Lower home prices, reduced interest rates, and high inventory levels create a rare window for calculated expansion, but only for those who approach it with localized market knowledge and realistic projections. Whether you're acquiring new properties, refinancing existing ones, or simply optimizing your current portfolio, success in this transitional period will belong to hosts who adapt quickly, maintain competitive pricing, and deliver exceptional guest experiences. As always.
