Toronto Real Estate Market Update — The Start of 2026
Overview
The Toronto real estate market in early 2026 continued to reflect the slower, more balanced conditions that developed throughout 2025.
The first two months of 2026 didn’t bring any dramatic shifts — and in many ways, that’s the story.
The Toronto real estate market has continued to move in a steady, controlled way, following many of the same patterns that defined 2025. Activity remains measured, pricing has continued to adjust, and buyers are approaching the market with a more deliberate mindset.
Rather than signaling a turning point, January and February have reinforced the environment we’ve been settling into.
A Measured Start to the Year
January began slowly, which is typical for the start of the year. There were 3,082 home sales across the GTA, down 19.3% compared to the same time last year, with 10,774 new listings coming to market. The average selling price came in at $973,289, down 6.5% year-over-year.
February brought a slight increase in activity. Sales rose to 3,868 transactions, down 6.3% compared to last year, while new listings declined to 10,705 — a 17.7% decrease year-over-year. The average price moved back above the $1M mark to $1,008,968, down 7.1% compared to February 2025.
Individually, these numbers don’t suggest a major shift. Together, they point to a market that continues to move at a steady, controlled pace.
A Market That Requires Patience
One of the clearest themes through the start of the year has been how intentional the market has become.
Buyers are active, but selective. They’re taking their time, comparing options, and moving forward when something feels well-positioned. The urgency that once defined the market is largely absent.
Homes that are priced appropriately and presented well are still selling. At the same time, anything that stretches beyond what the market will support is sitting longer and often adjusting.
Negotiation has become a standard part of most transactions again, and many properties are ultimately selling slightly below their asking price — a reflection of how much more control buyers have today.
Why Supply Matters Right Now
One of the more important developments in February was the relationship between sales and new listings.
While sales were down compared to last year, new listings declined at a faster rate. Fewer buyers are transacting — but even fewer sellers are coming to market.
That dynamic matters because inventory is what gives buyers leverage. When supply begins to tighten, even gradually, the balance of the market can start to shift.
We’re not seeing that shift fully play out yet, but it’s something to watch closely as we move into the spring.
A Market That Isn’t Uniform
As has been the case for some time now, the market is not behaving evenly.
Certain neighbourhoods — particularly those with limited inventory — are already showing signs of increased competition. Well-presented homes in these areas are attracting multiple offers and selling quickly.
At the same time, other segments of the market remain slower, with more negotiating room and longer days on market.
This isn’t a market defined by one trend. It’s a market defined by variation.
Looking Ahead to Spring
As we move further into 2026, the key question is whether activity begins to build in a more meaningful way.
There is still a significant amount of demand sitting on the sidelines, particularly from buyers who have been waiting for more stability in pricing and borrowing costs. If that confidence begins to return, we could see a gradual increase in activity.
What’s more likely than a sudden shift is a slow and uneven pickup as the market moves through the spring.
If supply continues to tighten while demand increases, we may begin to see more competition emerge in certain segments — even if the broader market still appears balanced.
Final Thoughts
The start of 2026 hasn’t introduced anything dramatically new — but it has started to show direction.
The market remains measured, but the decline in new listings is something to pay attention to. If that trend continues, it could begin to shift the feel of the market as the year progresses.
For buyers, this remains one of the more balanced environments we’ve seen in recent years — though that window may not remain open indefinitely.
For sellers, success continues to depend on alignment with current market conditions, not expectations from past cycles.
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