January
is typically a slower month for real estate, and early 2026 was no
exception. Buyer and seller confidence remained cautious amid global
economic uncertainty, affordability pressures, and one of the GTA’s most
severe snowfalls in over a decade. These conditions disrupted daily
activity and delayed market participation, contributing to softer
overall momentum. Confidence and affordability continue to be the
primary forces shaping opportunities across the GTA.
Market Performance
According
to TRREB, January 2026 recorded 3,082 home sales, down 19.3%
year-over-year. New listings declined 13.3% to 10,774, while active
listings rose to 17,975, resulting in 5.83 months of
inventory—signalling a more balanced market.
The average selling price fell to $973,289, a 6.5% annual decline and
the first time prices have dipped below $1 million since 2019.
The condo market remains more challenged,
with 5.83 months of inventory and an average price of $604,759. New
construction condo demand continues to lag, driven by affordability
constraints and investor caution, placing increased pressure on resale
inventory and extending selling timelines.
Affordability, Rates, and Stability
Affordability and confidence remain key to
recovery. While owning still costs roughly $600 more per month than
renting, interest rates have declined meaningfully. Despite over one
million upcoming mortgage renewals, widespread distress is not expected,
as borrowers were previously stress-tested at higher rates—limiting
systemic risk.
Segmentation and Neighbourhood Trends
Market performance continues to vary by
location and property type. Established, high-demand neighbourhoods are
outperforming, with steady buyer engagement and occasional multiple
offers—often with conditions. Meanwhile, newly built townhomes and semis
outside Toronto are seeing increased activity from first-time buyers
seeking space and relative value.
Looking Ahead to Spring 2026
As spring approaches, current conditions offer a
strategic window. Prices have adjusted, competition remains manageable,
and buyers retain leverage that may diminish later in the year. With
pent-up demand building and rates stabilizing, the spring 2026 market is
positioned for renewed activity—making now an opportune time for both
buyers and sellers.
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