The Toronto real estate market in late 2026 is characterized by softening prices and a shift towards buyer-leaning conditions. The benchmark home price in the Greater Toronto Area was $917,600 in September 2026, reflecting a 4.7% year-over-year decline. Market activity has been subdued, with sales falling and new listings increasing, giving buyers more choice and negotiating power. This market dynamic is significant for Canadians as it influences affordability, investment decisions, and the broader economic health of the country's largest urban centre.
Current Market Prices and Trends
As of September 2026, the Greater Toronto Area housing market shows clear signs of price moderation. The MLS Home Price Index benchmark price, which represents the value of a typical home, was $917,600. This figure marks a 0.9% decrease from August 2026 and a more substantial 4.7% drop compared to September 2025. The average sale price in the GTA for September 2026 was $1,006,409, which was 5.1% lower than the same month the previous year. The median price stood at $860,000, down approximately 5.4% year-over-year. The City of Toronto itself saw an average price of $1,034,320 in September 2026, which was about 5.1% lower than September 2025. The divergence between the rising average price and the falling benchmark price in September 2026 indicates a shift in the mix of homes sold rather than a broad market recovery.
The overall trend from 2025 to 2026 confirms a cooling period. The average residential sale price in the Greater Toronto Area decreased by 5.1 per cent between those years, declining from $1,088,166 to $1,032,207. Projections for the full year 2026 anticipate an average price decline of approximately 5.5 per cent compared to 2025 levels. On a national scale, the Canadian Real Estate Association reported the non-seasonally adjusted national average home price was $666,538 in September 2026, down 1.6% from the same month last year. The National Composite MLS Home Price Index was down 3.4% year-over-year in September 2026, marking the first time the annual decline had grown larger since January of that year.
Sales Activity and Inventory Levels
Sales activity in the Toronto market remained muted in the fall of 2026. GTA sales totalled 5,040 in September 2026, virtually unchanged from August 2026 but down 9.0% from September 2025. In the City of Toronto, home sales reached 1,937, up 9.6% from August but still about 6.1% below September 2025 levels. Nationally, home sales recorded over Canadian MLS Systems fell by 2.3% month-over-month in September 2026, and actual monthly activity came in 7.7% below September 2025. For the full year comparison between 2025 and 2026, the number of sales in the GTA increased by a marginal 0.2 per cent, rising from 37,025 to 37,105. However, sales for 2026 are projected to decline by approximately 0.5 per cent compared to 2025.
New listings saw a significant seasonal rebound in September 2026. In the GTA, new listings jumped to 16,500, up 36.6% from August 2026 as sellers returned after the summer lull, though they remained 14.4% below the level from a year earlier. In the City of Toronto, new listings surged to 6,521, up 55.3% month-over-month. Nationally, the number of newly listed properties fell by 1.8% on a month-over-month basis in September 2026. The overall number of listings in the GTA decreased by 14.5 per cent from 2025 to 2026, falling from 119,828 to 102,482. Active listings in the GTA rose 6.7% month-over-month to 26,131 in September 2026 and were 9.3% lower year-over-year.
Key Market Balance Indicators
Several metrics indicate the Toronto market shifted towards buyer-leaning conditions in September 2026. The sales-to-new-listings ratio is a critical indicator of market balance. In the GTA, the raw sales-to-new-listings ratio fell to 30.5% in September 2026 from 41.9% in August. In the City of Toronto, the ratio dropped to 29.7% from 42.1%. A ratio between 45% and 65% is generally consistent with balanced conditions, so readings below 45% indicate a buyer's market. The months of supply metric also rose. Simple months of supply in the GTA increased from 4.8 in August 2026 to 5.2 in September. Nationally, there were 4.9 months of inventory at the end of September 2026.
The long-term average for months of supply nationally is used to define market types. Based on one standard deviation above and below that long-term average, a seller's market exists below 3.6 months of inventory, and a buyer's market exists above 6.4 months. With the GTA at 5.2 months and the national figure at 4.9 months, conditions leaned towards buyers but were not deeply into buyer's market territory. Other indicators reinforced buyer leverage. Homes in the GTA sold for an average of 98% of the listing price. The average listing days on market rose to 34 from 33 in September 2025, and the average property days on market held at 51. The Toronto Regional Real Estate Board described homebuyers as being in a holding pattern due to economic uncertainty.
Factors Influencing the 2026 Market
The Toronto real estate market in 2026 is being shaped by a confluence of economic and policy factors. High borrowing costs, inflation, and economic uncertainty are the primary forces weighing on buyer demand and market conditions. The Canadian Real Estate Association noted that the start of the fall market in 2026 coincided with a jump in fixed mortgage rates, which sent some buyers back to the sidelines. Affordability relative to buyers' incomes is cited as the biggest factor preventing more first-time buyers from entering the market. These conditions are expected to persist, with inflation, interest rates, and economic uncertainty forecast to remain key factors influencing the market into 2027.
Government policies are also playing a role. The federal GST/HST rebate on new housing has helped support new home sales, according to industry analysis. The greatest impact of the rebate has been seen among new detached homes, semi-detached homes, and townhomes priced up to $1 million. The rebate has encouraged greater consideration of new homes as an alternative to resale properties in certain markets. Furthermore, the federal foreign buyer ban has been cited as reducing new construction development activity while also contributing to improved affordability in the resale market. Buyers have shown a greater willingness to purchase smaller homes located closer to work, though location remains the attribute they are least willing to compromise on.
Historic Price Context and Long-Term Trends
The Toronto real estate market has experienced significant price appreciation over the long term, providing context for the recent moderation. Historic statistics from the Toronto Regional Real Estate Board show the annual average MLS sale price was $294,747 in 2003. By 2004, that average had risen to $316,987. The current average price above $1 million represents a substantial increase over two decades. The decline of 5.1 per cent in the average residential sale price from 2025 to 2026, from $1,088,166 to $1,032,207, is a notable correction within that long-term upward trend. The projected decline of approximately 5.5 per cent for 2026 average prices compared to 2025 would continue this corrective phase.
This period of price softening follows a multi-month run of modestly positive progress earlier in 2026. The Canadian Real Estate Association reported that after four months of stable national prices, the MLS Home Price Index edged down 0.4% from August to September 2026. This monthly decline reflected a fresh step down for prices in Ontario, where demand softened in September, alongside the moderation of offsetting price gains in other regions. The year-over-year decline in the National Composite MLS HPI grew larger in September 2026 for the first time since January, indicating a renewed downward pressure on prices as the year progressed.
Common Metrics and Their Interpretations
Understanding the Toronto real estate market requires familiarity with several key metrics and what they signify. The benchmark price, based on the MLS Home Price Index, is designed to represent the value of a typical home by tracking price changes for a constant quality of home over time. The average sale price is the total dollar volume of sales divided by the number of sales, which can be influenced by the mix of homes sold. The median price is the midpoint of all sale prices, where half sold for more and half sold for less. The sales-to-new-listings ratio indicates market balance, with a long-term national average of 54.7%. Months of supply measures how long it would take to sell all current active listings at the current sales pace.
- Benchmark Price: Tracks a typical home's value, less affected by mix shifts.
- Average Sale Price: Calculated as total sales volume divided by number of sales.
- Median Price: The middle point of all sale prices in a given period.
- Sales-to-New-Listings Ratio: Below 45% favours buyers, above 65% favours sellers.
- Months of Supply: Below 3.6 months indicates a seller's market, above 6.4 months a buyer's market.
- Days on Market: Measures marketing time, with longer periods suggesting slower sales.
These metrics together paint a comprehensive picture of market conditions. For instance, in September 2026, the GTA had a sales-to-new-listings ratio of 30.5%, months of supply of 5.2, and a sale-to-list price ratio of 98%. This combination clearly pointed to buyer-leaning conditions where purchasers had more choice and could negotiate below the asking price. The Toronto Regional Real Estate Board and the Canadian Real Estate Association provide these figures monthly, allowing for ongoing analysis of market shifts.
Projections and Outlook for 2027
The outlook for the Toronto real estate market heading into 2027 suggests continued moderation. Industry projections envision positive but modest quarterly growth in both Canadian home prices and sales during 2027, following a subdued period. The factors that defined the 2026 market are expected to persist. High borrowing costs, inflation, and economic uncertainty are forecast to remain key influences. While housing activity is likely to remain subdued in 2027, the expectation of modest growth points to a potential stabilization rather than a sharp downturn. The path of the market will be closely tied to the Bank of Canada's interest rate decisions and broader economic performance.
The Canadian Real Estate Association has highlighted that uncertainty around the economy, employment, inflation and borrowing costs continues to weigh on purchase decisions. Until the direction of interest rates becomes clearer, some buyers are expected to remain on the sidelines. For sellers, a well-considered pricing strategy is emphasized as increasingly important in a market where buyers have more choice. The Greater Toronto Area is expected to remain a buyer's market in the near term, with affordability being the primary barrier for first-time buyers. The interplay between new housing supply, government policy, and economic conditions will shape the market's trajectory in the coming year.
Frequently asked questions
How much have Toronto home prices dropped?
Toronto home prices have shown a moderate decline. The benchmark price in the GTA was $917,600 in September 2026, down 4.7% from September 2025. The average residential sale price decreased by 5.1% between 2025 and 2026, falling from $1,088,166 to $1,032,207. Projections for the full year 2026 anticipate an average price decline of approximately 5.5% compared to 2025.
Is Toronto a buyer's or seller's real estate market in 2026?
As of September 2026, the Greater Toronto Area is a buyer leaning market. This is indicated by a sales to new listings ratio of 30.5 percent and months of supply rising to 5.2, which are metrics that favour buyers. The Toronto Regional Real Estate Board noted buyers are in a holding pattern due to economic uncertainty and high borrowing costs. Homes sold for an average of 98 percent of the listing price, and active listings increased month over month, giving purchasers more choice and negotiating leverage compared to the tighter conditions seen in August.
What is the average house price in Toronto?
The average house price in the Greater Toronto Area was $1,006,409 in September 2026. Within the City of Toronto specifically, the average price was higher at $1,034,320 for that same month. It is crucial to distinguish this from the benchmark price, which was $917,600 and is designed to represent the value of a typical home by adjusting for the mix of properties sold. The average price can be influenced by a higher volume of luxury or lower priced sales in a given period.
Are home sales increasing or decreasing in Toronto?
Home sales in Toronto are decreasing on a year over year basis. Sales in the Greater Toronto Area for September 2026 totalled 5,040, which was a 9.0 percent decline from September 2025. For the full annual comparison from 2025 to 2026, sales saw a very minor increase of 0.2 percent. However, projections for 2026 anticipate a decline of approximately 0.5 percent in the number of sales compared to the previous year, reflecting ongoing market softness.
What factors are affecting the Toronto housing market?
The Toronto housing market is primarily affected by high borrowing costs, inflation, and economic uncertainty, which have placed buyers in a holding pattern. Additional factors include government policies such as the GST HST rebate on new homes, which has supported sales of new detached homes and townhomes priced up to $1 million. The foreign buyer ban has also reduced new construction development activity while contributing to improved affordability in the resale market. These combined elements are expected to influence market conditions into 2027.
Sources and further reading
- Toronto Housing Market: Oct. 6th, 2026 Update wowa.ca
- October 16 2026 News Release | CREA Statistics stats.crea.ca
- Toronto Housing Market Outlook (Fall 2026) blog.remax.ca
- Provincial Resale Market Outlook: High Borrowing Costs Set ... economics.td.com
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