Toronto Housing Market Starts 2026 with Significant Slowdown
The Greater Toronto Area's real estate market began 2026 on a subdued note, with home sales experiencing a sharp decline compared to the previous year. According to the latest data from the Toronto Regional Real Estate Board (TRREB), the market is facing challenges on multiple fronts as buyers navigate affordability concerns and economic uncertainty.
Substantial Decline in Sales and Listings
January 2026 saw only 3,082 homes sold through TRREB, representing a significant 19.3% decrease from the 3,820 sales recorded in January 2025. This substantial drop in transactions reflects a cautious approach from buyers in the current economic climate.
New listings also experienced a notable pullback, with 10,774 properties entering the MLS system in January. This figure represents a 13.3% decline compared to the same period last year, indicating reduced activity on both the demand and supply sides of the market.
Price Declines Across All Property Types
The softening market has translated into price reductions across the board. The MLS Home Price Index composite benchmark fell by eight percent compared to January 2025, while the average selling price dropped to $973,289 – a 6.5% decline from the previous year's average of over $1.04 million.
This price weakness was evident across all major housing segments:
- Detached homes: Average prices down 7.4% year-over-year
- Semi-detached homes: Prices declined 9.7%
- Townhouses: Prices fell 9.4%
- Condominium apartments: Prices dropped 9.8%
Sales Declines by Property Type
The sales slowdown affected all housing categories, with condominium apartments experiencing the most significant percentage decline at 26%. Other segments also showed substantial decreases:
- Detached home sales fell 13.6%
- Semi-detached transactions dropped 19.2%
- Townhouse sales declined 23.7%
Market Conditions Favor Buyers
The current market dynamics have created conditions that increasingly favor buyers. Active listings climbed 8.1% year-over-year to reach 17,975 properties, providing more selection for prospective purchasers.
Properties are also taking longer to sell, with the average time on market increasing to 45 days from 37 days a year earlier. The average property days on market rose to 67 days from 55 days, indicating a more deliberate pace of transactions.
Seasonal Adjustments Show Continued Pressure
On a seasonally adjusted basis, TRREB reported that home sales decreased month-over-month compared to December, while new listings saw a slight increase. Both the composite benchmark and average price continued their downward trend from December, suggesting ongoing price pressure at the start of the year.
"January's market data reflect a continuation of a slower start to the year compared to a year ago, as affordability challenges and economic uncertainty remain top of mind for many buyers," TRREB stated in its market release.
The board further noted that while some buyers are taking advantage of improved selection and more balanced conditions, home sales continue to be suppressed relative to early 2025 as market participants adapt to the current interest rate environment.
The combined January figures paint a clear picture of a GTA housing market that remains weaker than it was at the same time last year, with multiple indicators pointing to continued challenges in the months ahead.
