Toronto’s real estate market ended 2025 quieter and more affordable, but the stage is set for a gradual recovery in 2026 rather than a dramatic rebound or a crash. This creates real opportunities for both buyers and sellers who are prepared to be strategic instead of reactive to pessimistic headlines.
Where the market stands now
TRREB’s December numbers confirm that the market is still digesting higher interest rates and economic uncertainty.
- GTA home sales fell compared to 2024, while new listings increased, giving buyers more choice and leverage at the negotiation table.
- Average prices ended 2025 below 2024 levels, and benchmark values are down from the peak, signalling that the market has already gone through a significant correction.
- The result is a calmer, more balanced environment where homes take longer to sell and buyers have time to do their homework.
This is a softer, more negotiable market, but not a freefall, because strong population growth and limited supply still underpin long‑term housing demand in the GTA.
What to expect in 2026
Looking ahead, 2026 is shaping up as a transition year from correction to recovery.
- Interest rates have already come down from their peak, and experts expect more stability rather than dramatic moves, which helps buyers plan with more confidence.
- TRREB and many economists see improved affordability as the foundation for a rebound once households feel more secure about jobs and the broader economy.
- Early 2026 may still feel “slow,” but there is a growing risk that once sentiment shifts, demand will return faster than new supply can catch up.
In other words, the main headwind now is confidence—not fundamentals.
Opportunities for buyers
For buyers sidelined during the frenzy of past years, this market offers a rare window.
- More listings and fewer competing offers create room to negotiate on price, conditions, and closing dates.
- Corrected prices and lower rates can improve what you qualify for, especially if you focus on long‑term needs rather than chasing the bottom.
- Buyers who act before the next upswing may lock in better value than those who wait for “perfect” timing.
Opportunities for sellers
Sellers can still succeed in this market with the right pricing and preparation.
- Homes that are priced competitively and presented well are still selling, while overpricing often leads to longer days on market and deeper discounts later.
- Upsizing sellers may benefit from selling in a softer market but buying into a higher price bracket that has also corrected, narrowing the gap between properties.
- Listing before confidence fully returns—and inventory rises again—can help your property stand out.