Toronto Real Estate Market Update – February 2026

A Market in Transition

January’s numbers set the tone for early 2026. The Toronto Regional Real Estate Board reported 3,082 home sales, a 19.3% drop compared to last year, reflecting a market where buyers have more time, more choice, and more negotiating power. The average selling price dipped to $973,289, down 6.5% year‑over‑year, marking one of the lowest average prices Toronto has seen in years.

This shift isn’t a sudden downturn—it’s part of a broader rebalancing driven by improved inventory levels, cautious consumer sentiment, and the long‑awaited stabilization of interest rates.

Current Price Trends

Fresh MLS® data shows the average Toronto home price hovering around $999,411, with 4,442 new listings hitting the market over the past 28 days. Homes are spending a median of 36 days on market, giving buyers more breathing room than they’ve had in years.

While the average price is slightly below the $1M mark, the mix of homes being sold is playing a role. More lower‑priced properties—particularly condos—are trading hands, pulling the average down. But even when adjusting for home type, prices are still softer across the board.

What’s Driving the Shift?

1. Increased Inventory

TRREB’s 2026 Market Outlook highlights elevated supply levels across the GTA, giving buyers more options and reducing the bidding‑war pressure that defined the pandemic years.

2. Stabilizing Interest Rates

Forecasts suggest the Bank of Canada will maintain rates between 2.75% and 3.25% throughout 2026, creating a more predictable borrowing environment. This stability is expected to bring more first‑time buyers back into the market.

3. Improved Affordability

With prices softening and inventory rising, affordability—while still a challenge—is improving relative to the last several years. Many patient buyers who sat on the sidelines in 2024 and 2025 are now re‑entering the market.

Segment Snapshot

Detached Homes

• 2025 average: $1,387,000
• 2026 projected: $1,430,000 – $1,455,000 (3–5% growth expected)

Detached homes remain the most supply‑constrained segment, but the pace of price growth is expected to be moderate.

Condos

• Projected 2026 growth: 2–4%

Condos continue to be the most accessible entry point for first‑time buyers, especially with increased inventory downtown and in midtown.

Buyer’s Market Conditions Emerging

Multiple indicators point toward a buyer‑leaning market in early 2026. With sales down, listings up, and prices softening, buyers have more leverage than they’ve had in nearly a decade. TRREB notes that this trend is expected to continue through the year as affordability pressures persist and supply remains elevated.

For sellers, pricing strategically and preparing homes thoroughly will be essential to stand out in a more competitive landscape.

Looking Ahead: What to Expect This Spring

As we move toward the spring market, expect:

• More listings as sellers gain confidence in stable rates
• Steady but modest price growth in higher‑demand segments
• Increased activity from first‑time buyers
• Continued rebalancing across the GTA

If February is any indication, 2026 may be the year Toronto finally finds its footing after years of volatility.