Toronto-area home prices will continue their downward spiral well into 2026, after a “year of uncertainty” for the real estate market.
That’s according to the largest Canadian real estate company, which forecasts the aggregate price of a home in the fourth quarter of 2026 will decrease 4.5 per cent year over year to $1.05 million in the Greater Toronto Area.
According to Royal LePage’s 2026 market outlook published Tuesday morning, the median price of a single-family detached property is expected to decrease one per cent to $1.38 million over the same period, while the median price of a condominium is forecast to decline 6.5 per cent to $615,885.
“I think it (2025) was the year of uncertainty, and it’s exactly what we’re seeing right now; people are worried about what’s going to happen with their job, what’s going to happen with their investments, what’s going to happen with tariffs. There’s still so many question marks out there,” said Shawn Zigelstein, broker and leader of Team Zold, Royal LePage Your Community Realty.
“That has put potential buyers on the sidelines, and buying real estate on the back burner.”
In November, the GTA experienced its 10th month in a row of year-over-year price declines, according to the Toronto Regional Real Estate Board (TRREB).
As economic and job uncertainty continues to plague the market, the impact on sales and prices will be felt throughout 2026.
The GTA bucks the national trend, which will see average prices for all property types increase by one per cent year over year in the fourth quarter, with single-family detached home prices increasing by two per cent, according to the Royal LePage report.
However, nationally, condos are also set to decline, with a 2.5 per cent drop.
Small condos are struggling to sell, Zigelstein said, which is unlikely to change in the next year as investor activity remains soft and end users want bigger units.
“When it comes to condominiums, what we are seeing is the larger units that could be used for a small family or someone downsizing, those units are selling,” Zigelstein said.
“We’re having a difficult time in the market right now with studio apartments, small one bedrooms. There’s a lot of inventory of those sitting there, and we don’t think that’s going to change in the near future.”
There’s also record supply of new condos coming to the market for the next 18 to 24 months due to the presale boom during the pandemic when interest rates were ultralow, he added.
Because condo inventory is already so high, adding more supply will increase inventory further, placing downward pressure on condo prices, Zigelstein said.
Another factor shaping buyer hesitation is the shift back to in-office work, the report said.
A growing number of workplaces require employees to return to in-office five-days a week. Potential buyers who moved outside Toronto during the pandemic may rent first before they decide to buy a property in the city, to see if they wish to uproot their families or lifestyle for work, Zigelstein said.
There is some “good news” for consumers looking for freehold properties under $1 million, which are popping up more through out the GTA, he said.
“We have seen a year-over-year increase in transactions for freehold properties under $1 million, which tells us that some buyers are capitalizing on current market conditions,” Zigelstein said.
GTA real estate prices have dropped by more than 20 per cent since the February 2022 peak, but Zigelstein says the pandemic pumped prices up artificially and that it’s better to compare the market to pre-pandemic. While the lower prices and borrowing costs will interest first-time homebuyers, it’s not possible to forecast how much that will improve sales.
“Now let’s get back to reality,” he said. “The market will bounce back a little bit. How much is it going bounce back? Nobody can guess.”
