Toronto Real Estate Forecast 2026
Toronto Real Estate Market Update – February 2026 | Prices Drop Below $1M, Inventory Rises
The Toronto real estate market is showing clear signs of recalibration as we enter 2026. According to the latest TRREB data, January home sales declined year over year, inventory increased, and the average home price fell below $1 million for the first time since 2019.
For buyers, this shift creates leverage. For sellers, it demands a strategy. And for investors, it signals a changing condo landscape heading into the spring market.
Toronto Home Sales Decline in January 2026
Based on January 2026 data reported by TRREB, the GTA recorded 3,082 home sales, representing a 19.3 percent decline year over year compared to January 2025.
January is typically a slower month, but this year’s slowdown was amplified by ongoing economic uncertainty and cautious consumer confidence.
Active Listings Rise as the Market Shifts Toward Balance
While new listings entering the MLS system totaled 10,774, down 13.3 percent year over year, active listings increased to 17,975. This resulted in 5.83 months of inventory, marking an 8.1 percent increase and pointing toward a more balanced market environment.
More inventory means buyers have more choice and more negotiating power than they’ve had in years.
Toronto Average Home Price Falls Below $1 Million
The most attention-grabbing headline this month is pricing.
The average selling price in the GTA declined to $973,289, down 6.5 percent year over year. Notably, this is the first time the average price has dropped below $1 million since 2019 — effectively resetting values to levels not seen in nearly seven years.
This does not mean the market is collapsing. It means the market is adjusting, and affordability is forcing buyers to be more selective.
Why the Toronto Market Slowed Down
Several key factors contributed to January’s softer market activity.
TRREB notes that ongoing concerns around global trade relations and broader economic uncertainty continued to weigh on both buyer and seller confidence. Many households remain hesitant to commit to long-term mortgage obligations while the economic outlook remains unclear.
In addition, the GTA experienced significant snowfall not seen in over a decade, which disrupted daily activity and temporarily stalled real estate momentum.
The combination of weather, affordability pressure, and cautious sentiment created a slower start to 2026.
Toronto Condo Market Update: Inventory Up, Demand Softer
The condominium segment remains the most challenged part of the market.
Inventory levels reached 5.83 months, and the average condo selling price sits at $604,759. Demand for new construction condos continues to soften, driven by affordability constraints, investor caution, and shifting buyer preferences.
As a result, resale condominiums are facing increased competition and longer selling timelines.
GTA Neighbourhood Trends: Some Areas Are Still Strong
Not every neighbourhood is experiencing the same market conditions.
TRREB highlights that mature, historically high-demand neighbourhoods continue to outperform the broader market. These areas are seeing stronger buyer engagement and, in some cases, multiple offers when marketing and pricing are executed aggressively.
However, even in multiple-offer scenarios, conditional sales remain common — showing that today’s buyers are still cautious and disciplined.
Townhomes and Semis Are Seeing Increased Activity
While the condo segment softens, TRREB notes that newly built semi-detached homes and townhomes in communities surrounding Toronto are seeing stronger activity.
These property types continue to attract first-time buyers seeking more space and better affordability compared to detached homes and central condos.
Mortgage Renewals and Interest Rates: Why Distressed Selling Is Unlikely
A major talking point for 2026 is the wave of mortgage renewals.
Over one million mortgage renewals are expected over the next 12 months. Importantly, many of these households were stress-tested at higher interest rates. TRREB notes that because rates have declined meaningfully since affordability concerns first intensified, a surge in distressed listings is not anticipated.
This reduces systemic risk and supports market stability moving forward.
Toronto Real Estate Forecast 2026: What to Expect This Spring
As we move toward the spring 2026 market, the current environment presents a strategic window of opportunity.
TRREB notes that prices have adjusted, competition remains measured, and buyers currently hold greater leverage than they are likely to experience later in the year. Historically, activity increases as weather improves and sidelined buyers re-enter the market.
For buyers, this may be one of the more favorable entry points before the traditional spring surge.
For sellers, pricing and preparation now will be critical to standing out as competition increases.
Final Thoughts: A Strategy Market, Not a Guessing Market
The Toronto housing market is not dead. It has simply shifted.
Confidence and affordability continue to shape market dynamics and remain the primary drivers influencing opportunities across the GTA.
In a market like this, the winners are the ones who price correctly, prepare properly, and move with a plan.
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