The Toronto real estate market 2026 is entering the new year with cautious optimism. After a subdued performance in 2025, early indicators suggest the Greater Toronto Area (GTA) may be poised for a gradual recovery. Lower interest rates, pent-up demand, and stable price levels could contribute to a more active spring season, though challenges remain.
2025 Set the Stage for Stabilization
Home sales in Toronto reached a 25-year low in 2025, with just over 62,000 transactions recorded. Despite the weak numbers, prices held relatively steady, finishing the year at an average of $1,055,093—virtually unchanged from 2024. This price resilience, even amid a surge in inventory, points to underlying demand that could reignite in 2026.
New listings in the GTA rose 5.5% in December 2025, reaching 15,441 units—the highest volume in the country. While this increase may signal a buyer’s market in the short term, it also gives house-hunters more choice after years of supply constraints.
Buyer Confidence Could Return This Spring
With the Bank of Canada expected to hold rates steady through early 2026, many would-be buyers are taking renewed interest. For first-time homeowners in particular, lower borrowing costs and reduced competition have created a window of opportunity.
CREA forecasts a 5.1% national increase in home sales this year, led by Ontario and B.C. In Toronto, realtors are already seeing early signs of increased inquiries and activity as the spring market approaches.
Toronto’s Market Still Has Hurdles
Despite the potential upswing, the Toronto real estate market 2026 isn’t without its challenges. Affordability remains a significant barrier, particularly for younger buyers. The average detached home is still well above $1.3 million, and condo prices, while softer, have yet to drop enough to shift the affordability equation.
Investor pullback and project cancellations also weighed on the city’s pre-construction and condo sectors in 2025. Supply is no longer the only issue; consumer confidence must also improve for momentum to build.
East Toronto Shows Quiet Strength
In contrast to the broader GTA, some East Toronto neighbourhoods are showing resilience. Communities like Scarborough, Danforth Village, and The Beaches continue to attract buyers seeking better value and lifestyle balance. With improved transit options and comparatively lower home prices, East Toronto remains a smart choice for those entering the market.
Reason to Be Cautiously Optimistic
The Toronto real estate market 2026 isn’t on fire yet, and that might be a good thing. After the volatility of recent years, stability and measured growth could set the foundation for long-term health. If you’re thinking about making a move this year, the spring market could offer a sweet spot of lower rates, increased inventory, and less competition.
Want to know how your East Toronto home fits into the 2026 market? Contact us today for a complimentary home valuation and expert advice on timing your next move.
