Toronto among few markets to see home prices continue to drop in 2026, says Royal LePage

The forecast is unchanged from the 2026 market outlook the brokerage released at the end of last year.

“The real estate market right now is in gridlock,” said Shawn Zigelstein, broker and leader of Team Zold, Royal LePage Signature Realty. 

“People can’t decide to put their house on the market, sellers and buyers are both waiting for prices to go up or down. Right now the market is just flat.” 

The GTA and Greater Vancouver Area, which is forecast to see a price drop of 3.5 per cent, are the only two regions projected to see price declines this year. Most other regions will see modest price gains — except for Quebec City, which is forecast to see a significant 12 per cent increase due to a “chronic lack of inventory,” the report said. 

The aggregate price of a home in the GTA decreased 4.7 per cent year over year to $1.09 million in the first quarter of 2026. On a quarterly basis, however, the aggregate price of a home in the GTA increased a modest 0.7 per cent.

The price of a home in the GTA is forecast to be $1.03 million in the fourth quarter — a 5 per cent drop from the first quarter.

In the city of Toronto, the median price of a single-family detached home decreased 9.7 per cent year over year to $1.52 million in the first quarter, while the median price of a condominium decreased 3.8 per cent to $660,600.

The single-family home price drop is significant, but it’s important to factor in what types of single-family homes sold in the first quarter, Zigelstein said. 

More expensive properties priced at $3 million or more might have traded at a higher volume last year compared to this year, while more townhomes or less expensive semi-detached properties sold this year, he added. 

The market is flat but there are still better opportunities for first-time home buyers with better deals and lower prices for entry-level properties, Zigelstein said. And downsizers can access smaller properties at better price points, he added. These two demographics are the primary driving force for sales in the spring market, resulting in a slight uptick in activity, the report said. 

Rising interest rates on fixed-rate mortgages, due to soaring oil prices from the Middle East conflict, are also pushing some buyers to jump into the market now. 

“We’ve got clients preapproved for a good fixed-rate term, and once that interest rate changes that’s their deadline to see if they want to jump in now or not,” Zigelstein said, adding that while it could result in more sales, buyers won’t sprint to buy houses. 

The spring market needs to progress further to compare its performance to last year, and it’s too difficult to know if the real estate market has reached it’s bottom, Zigelstein said. 

“We’re expecting no major changes in the market this year,” he said. “The economy is stagnant and we’re still facing geopolitical uncertainty. We’re just waiting to see if the spring market improves.”