If you only read the headlines, you’d think Toronto real estate is in trouble. Heck, if I wasn’t me I would too.
My clients have been calling in full-blown panic mode after last month’s TREB stats came out. But they didn’t need to. The truth is that I didn’t sell many homes in 2022 (my dad died, I travelled, I focused on selling listings and not helping buyers)… the peak, the year people over paid for most product. But it was one for the record books. Here’s why it’s going to be ok – and why most people are still above water.
So here we go…
January 2026 recorded just 3,082 sales — down 19.3% year-over-year. It was the slowest January since 2009. Active listings climbed to nearly 18,000 units. Months of inventory pushed close to six months GTA-wide and nearly 6.5 months inside the city.
The average GTA home price slipped to $973,289 — back under $1M for the first time in five years.
On paper, that sounds dramatic.
But markets don’t reward panic. They reward perspective.
And when you zoom out, something much more strategic is happening.
We’re Not Crashing. We’re Normalizing.
Detached homes are down roughly 25–26% from their 2022 peak.
Semis and towns have corrected about 25%.
Condos are down roughly 19% over four years.
That’s not structural failure. That’s a full unwinding of the pandemic surge.
We’ve essentially erased the speculative premium.
What matters more is what isn’t happening:
- No wave of distressed selling
- No mass forced liquidations
- No systemic credit crisis
- Mortgage renewals occurring without collapse
That tells you the underlying fundamentals of Toronto real estate are intact.
Sentiment is weak. Stability is not.
Inventory Is High — And That’s a Gift
Active listings sit 83% above the 10-year average. The sales-to-new-listings ratio has dropped to 29%, far below the balanced 45–60% range.
Translation: buyers have leverage.
Not the kind of leverage we saw in 2021 where you waived inspections and wrote love letters. Real leverage.
You can negotiate price.
You can negotiate conditions.
You can negotiate timing.
You can negotiate inclusions.
When buyers have choice and power at the same time, intelligent capital moves quietly.
And right now, choice is exceptional.
The Real Story: Affordable Real Estate Is Reappearing
This is the part very few people are talking about.
- 42% of low-rise homes are now selling under $900K (up from 30% last year).
- 6% of low-rise homes are selling under $600K — more than double last year.
- 35% of condos are trading under $500K, compared to just 17% a year ago.
For the first time in years, affordable real estate in Toronto is expanding instead of shrinking.
Pair that with the increase in the mortgage insurance cap from $1M to $1.5M, and suddenly a significant portion of Toronto’s inventory becomes accessible to first-time buyers and move-up families.
And here’s what’s important:
First-time buyers are active.
That’s historically the first signal of stabilization in any housing cycle.
Toronto Is Outperforming the 905
While outer suburban markets are seeing steeper annual price declines — some between 9% and 13% — Toronto proper is holding firmer, generally in the 3% to 9% range depending on segment.
Central Toronto detached homes are down only about 1% year-over-year.
Toronto West semis are hovering around flat.
Toronto East detached properties around $1.1M are down about 10% — offering significant relative value inside the city.
This divergence matters.
Urban land in established neighbourhoods has historically recovered faster and appreciated more reliably than outer suburban inventory-heavy markets.
If you’re going to buy during uncertainty, quality matters more than timing.
The Condo Conversation Is Incomplete
Condo inventory is elevated at roughly 7.8 months of supply. Prices have declined 8.6% year-over-year to approximately $631,932.
But new condo construction launches have slowed dramatically due to financing constraints and rising development costs. Completion pipelines are projected to taper significantly toward 2029.
That means today’s supply imbalance could turn into tomorrow’s scarcity cycle.
Weakness now often plants the seeds for future appreciation.
And Toronto’s long-term drivers — immigration, employment density, constrained land — have not disappeared.
Are We at the Bottom?
Possibly close.
After a roughly 22% correction across four years, prices are hovering near pre-COVID levels.
Could we see another 3–5% softness? It’s possible.
But the dramatic repricing has already happened.
Markets rarely ring a bell at the bottom. They transition quietly while headlines remain negative.
By the time confidence returns, leverage usually disappears.
So What Does This Mean If You Want to Buy a Home in Toronto?
It means this is not a market for emotional decision-making.
It’s a market for strategic positioning.
The buyers who benefit most in environments like this are not the loudest — they’re the most prepared.
They:
- Study supply and absorption trends
- Negotiate intelligently
- Focus on long-term location fundamentals
- Understand that opportunity often feels uncomfortable in the moment
Buying into strength feels safe.
Buying into reset cycles builds wealth.
Why Guidance Matters More in Transitional Markets
In fast markets, almost any competent agent can “transact.”
In transitional markets, nuance matters.
Understanding inventory absorption.
Interpreting sales-to-listings ratios.
Reading micro-neighbourhood divergence.
Knowing when a price drop signals value versus risk.
This is the difference between simply purchasing property and making a strategic move within Toronto real estate.
When clients ask how to identify the best real estate agent in Toronto, my honest answer is this:
Look for someone who can interpret data without being ruled by headlines.
Look for someone who understands both numbers and neighbourhood psychology.
Look for someone who isn’t reactive — but analytical.
Markets like 2026 don’t reward hype.
They reward clarity.
Toronto real estate is not collapsing.
It’s recalibrating.
And for buyers who understand cycles, leverage, and location fundamentals, this may quietly become one of the most interesting positioning windows we’ve seen in years.
