GTA Housing Market Update: Could 2026 See a Late-Year Rebound?

Home sales in the Greater Toronto Area started the year on a slower note, but tightening market conditions may lead to stronger activity later in 2026.

Recent housing data shows that resale transactions declined compared to the same month last year. However, the number of new properties entering the market dropped even more sharply. This imbalance between supply and demand could eventually lead to increased competition among buyers if interest in purchasing homes rises again.

In February 2026, 3,868 homes were sold through the region’s multiple listing service, representing a 6.3% decrease from February of the previous year. At the same time, new listings fell by 17.7%, with 10,705 properties added to the market.

Home prices also continued to move downward. The benchmark home price index declined by 7.9% compared to the same time last year, while the average selling price dropped 7.1% to $1,008,968. When adjusted for seasonal factors, both price measures were also lower than they were in January 2026.

Although the market is currently experiencing softer conditions, demand for homeownership remains strong. A large number of potential buyers are delaying their purchases while waiting for prices to stabilize and for more positive economic signals. Once confidence improves and prices level off, sales activity could pick up significantly in the second half of 2026 and potentially continue gaining momentum into 2027.

Looking further ahead, housing experts continue to emphasize the need for a wider range of housing types. Increasing the supply of “missing middle” housing, such as townhouses, duplexes and small multi-unit buildings, is seen as an important step in bridging the gap between high-rise condominiums and traditional single-family homes.

There are also calls for government action to support the development of these housing options through targeted policies and initiatives.

Seasonally adjusted figures show that both home sales and new listings declined compared to the previous month. However, listings decreased more quickly than sales, contributing to tighter market conditions.

Surveys also suggest that many homeowners are hesitant to put their properties on the market in 2026, which may continue to limit the number of available listings. Meanwhile, many buyers remain on the sidelines while monitoring price trends.

If listing activity remains low during the spring months, competition among buyers could increase, potentially helping stabilize prices and supporting a recovery in home sales later in the year.