2026 Toronto Real Estate Market: Our Predictions

| Buying

With 2025 already becoming a distant memory, many are wondering what 2026’s real estate market in Toronto might bring. Here we offer some insights into what the trends and general market vibe are likely telling us to expect in 2026.

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2025 Toronto Housing Market Overview

This is where the year of reduced housing prices and borrowing costs left us: Affordability still couldn’t entice enough buyers to bite, thanks to economic uncertainty. Buyers feeling more secure in their finances and jobs, took advantage of the market, but their efforts weren’t enough to put a dent in elevated inventory. Low prices left a bitter taste in sellers’ mouths as the year wound down.

One Certainty: Unpredictability in the GTA Housing Market

If there’s one thing 2025 taught us, it’s that unpredictability continues to be the only thing we can be certain of. Things are even more unstable with the recent American posturing that has the whole world on edge. Other than some doom spenders and those a little better off, most buyers remain on the sidelines, wondering what will happen next.

Homeowners are frustrated with potential losses when pressured to sell due to increased borrowing costs when they renew their mortgages, despite more affordable borrowing costs. With many mortgage renewals facing double or more the primo rates that once teetered below 2 percent, inventory will likely remain too high to help balance out the market.

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2026 Remains Buyer Leaning

So far, GTA real estate news is showing that 2026 will remain buyer-leaning. Although homeowners hoped to see prices rise, the current market continues to favour buyers. Unfortunately, it looks like it’s going to be more of a transition year versus an uptick, so caution seems to be the name of the game for both buyers and sellers at the moment.

Buyer 2025 Toronto Housing Market Watch

For those of you feeling confident in their employment and financial stability, crunch some numbers to see how your current rent compares to the average mortgage payments you’re looking at based on your down payment and pre-approved mortgage budget. We say “crunch the numbers” because many are benefitting from lower rents from the unsteady rental market. More units are available thanks to the many builders converting tons of unsold units into rentals and fewer tenants seeking homes. In an uncertain market, rent feels a lot safer than carrying a mortgage.

That said, the deals on condos right now are silly good, making them hard to resist. The hard-hit condo market is taking it from all sides. Fewer students in town are forcing investors to sell, adding to a glut of inventory from a mix of investors and homeowners selling due to increased interest rates. 2025 average condo prices dropped to $628,029, with slightly higher prices in 416 areas at $663,227 and a gob-smacking average in 905 areas at just $555,110.

Best-case scenario: Prices will largely remain flat or drop a bit lower along with interest rates.

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Sellers and the 2026 Toronto Housing Market

First things first. Average prices at the end of 2025 were at $1,006,735, but you have to keep in mind averages include those long-suffering condo apartment prices, which drag overall prices down. If you look at homes by type, prices might not feel so bad:

  • Detached: $1,302,980
  • Semi: $957,357
  • Town: $862,024

Prices get better or worse depending on where you live:

  • Detached 905: $1,239,882
  • Detached 416: $1,498,079
  • Semi 905: $857,237
  • Semi 416: $1,122,309
  • Town 905: $832,199
  • Town 416: $976,161

So while Toronto real estate news continues to send sellers bad vibes, you need to consider your particular area and home type.

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Next, how’s your home equity looking? If you don’t have a mortgage or have paid down a fair chunk of your balance, your profitability is much better than someone who bought 5 or even 10 years ago. If you’re in a position where you have to sell or were planning to downsize, there’s one upside to selling now: With condo prices low, you can save a ton on your next home, leaving more of your equity for investment or to cover retirement costs. So having a respectable amount of equity might allow you to cover the entire costs of a lower-priced home, maintain your mortgage-free status, and even have some savings left over. It might be worth a chat to see if this is a good plan for your scenario.

The best-case scenario: More house sellers decide to wait things out, and inventory starts to ease, offering a slight adjustment that might mean better prices. Consumer confidence starts to recover, and more buyers venture into the market, further reducing inventory and helping to balance out the market.

No one knows with absolute certainty what will happen in the future, but one thing is crystal clear: it’s always a good idea to work with the best Toronto real estate team when buying or selling. Get in touch with The Christine Cowern Team today by calling 416.291.7372 or emailing hello@christinecowern.com.