The Toronto Regional Real Estate Board (TRREB) reports the city's housing market concluded 2025 in a decline, marking a subdued end to the year. However, the board's latest analysis suggests a turnaround could be on the horizon for the current year.
Market Ends the Year on a Soft Note
According to data released by the board, sales activity and average prices in the Greater Toronto Area (GTA) experienced a noticeable dip in the final months of 2025. This downward swing followed a period of relative adjustment throughout the year. The board cites a combination of factors, including elevated borrowing costs and persistent economic uncertainty, which continued to weigh on buyer sentiment and purchasing power as the year closed.
The cooling trend was observed across most major housing segments, though the impact varied by property type and location within the region. The slowdown represents a continuation of the market's recalibration from the peak activity levels seen in previous years.
Optimism for a 2026 Rebound
Despite the weak finish to 2025, the TRREB is projecting a more positive trajectory for the market in 2026. Board analysts point to several indicators that could fuel a recovery. Anticipated interest rate cuts by the Bank of Canada are seen as a primary catalyst, potentially easing affordability constraints for new buyers.
Furthermore, sustained immigration targets and a tight rental market are expected to funnel continued demand into the ownership sector. The board's forecast suggests that pent-up demand from buyers who paused their searches could materialize as financial conditions improve, leading to a gradual increase in sales volume and price stability as the year progresses.
Navigating the Current Landscape
For now, the market remains in a balanced-to-buyer's advantage state in many areas, offering less competition than during the frenzied periods of the past. Sellers are advised to price their properties competitively and realistically, based on recent comparable sales, to attract serious offers in the current climate.
Prospective buyers, while facing lower prices than the peak, are still contending with high mortgage qualification hurdles. Financial planning and mortgage pre-approval are considered essential steps for those looking to enter the market in early 2026. The board emphasizes that the predicted recovery is expected to be moderate and steady, rather than a sudden return to rapid price escalation.
The coming months will be critical in determining whether the board's optimistic forecast holds, with spring typically being a key season for real estate activity that will set the tone for the rest of the year.
