Market Report | January 2026
Market Report | January
A resilient Toronto market enters 2026 with renewed balance, setting the stage for confident buyers and sellers alike. This month’s numbers reveal a city poised for steady momentum as fundamentals strengthen and optimism returns.
January 2026 opened with a real estate market adjusting to a new equilibrium—one shaped by stabilized interest rates, resilient employment fundamentals, and a natural cooling from the highs of the past few years. Drawing on the latest TRREB Market Watch release and the 2026 Market Outlook & Year in Review, this report provides a data‑driven assessment of where the Greater Toronto Area (GTA) market stands today and where it is likely heading in the year ahead.
January 2026 recorded 3,082 home sales across TRREB. This figure reflects a 19.3% decline from January 2025, consistent with a measured normalization following several years of elevated demand. Meanwhile, 10,774 new listings entered the market, down 13.3% year-over-year, indicating continued supply-side tightening.
Pricing trends also softened modestly:
The average selling price declined to $973,289, down 6.5% from the previous year.
The MLS® HPI Composite Benchmark registered an 8% annual decrease, underscoring the recalibration currently underway.
Despite these headline numbers, the GTA market remains fundamentally resilient—supported by robust employment, stable population inflows, and a gradual rebalancing of supply and demand.
Greater Toronto Area - Monthly Sales Activity
Market Activity: Key THemes for January 2026
Demand Remains Underpinned by Strong Fundamentals
Even with softer sales volumes, buyer demand remains structurally supported. The Toronto unemployment rate sits at 2.3%, and one‑year employment growth—approximately 5.8%—continues to sustain household formation and home‑buying capacity.
Immigration continues to bolster long‑term demand, and many prospective purchasers who paused due to rate volatility are poised to re‑enter the market as conditions stabilize.
Price Adjustments Reflect Healthy Normalization
Most price declines were concentrated in lower‑density, higher‑ticket segments—particularly detached homes. By contrast, the condominium segment demonstrated greater resilience. Condo apartments accounted for 1,352 of January’s sales and continue to serve as the primary point of entry for young professionals and first‑time buyers.
This segmentation points to a bifurcated market: higher‑price categories adjusting downward more noticeably, while accessible segments stabilize earlier.
Supply Conditions Continue to Tighten
New listings remain below historical norms. Inventory metrics—such as Months of Inventory and Days on Market—indicate competitive conditions in many sub‑markets despite slower sales velocity.
This constrained supply environment is a buffer against more pronounced price corrections.
Monetary Conditions Are Stabilizing
The Bank of Canada’s policy rate is now holding steady after the prior tightening cycle. With inflation trending downward and rate expectations leveling off, buyers and sellers are operating in a more predictable financing environment. This stability often leads to improved consumer confidence as the year progresses.
Regional Sales Breakdown - January 2026
The table below summarizes confirmed sales figures for key GTA regions, based on a visual reconstruction of TRREB’s page‑3 transaction table.
January 2026 Home Sales by Region
These figures highlight the continued strength of the core urban market (Toronto + York), while Peel and Halton maintain solid activity driven by family‑oriented buyers and established suburban demand. Durham’s results reflect a slight cooling from prior years but remain consistent with long‑term averages.
City of Toronto Monthly Sales
York Region - Active Listings
York Region - Monthly Sales
Interpretation: What the Numbers Tell Us
A Market Reset, Not a Retraction
The GTA is undergoing a textbook recalibration—transaction volumes easing after years of accelerated activity, while pricing realigns to new borrowing realities.
Enduring Economic Tailwinds
Employment strength, population growth, and stable fiscal conditions remain powerful drivers of sustained long‑term demand.
Segment Rotation Ahead
Expect continued resilience in the condo segment, while detached and semi‑detached homes should stabilize later in the year as borrowing cost certainty improves.
Supply Constraints Will Anchor Prices
With new listings declining and inventory measures remaining tight, the risk of a significant market overshoot on the downside remains low.
Outlook for 2026: Cautious Optimism with Upside Potential
The GTA real estate market enters 2026 with strong underlying fundamentals and signals pointing to stabilization as the year unfolds.
Here’s what we anticipate for the remainder of 2026:
Sales volumes will gradually recover as consumer confidence improves with clearer interest‑rate direction.
Price declines will moderate, with potential for mild appreciation in the second half of the year, particularly in the condo and select townhouse markets.
Immigration and job growth will continue to fuel long‑term demand, especially within Toronto’s core and transit‑oriented communities.
Developers will maintain disciplined supply pipelines, supporting balanced market dynamics.
While January’s numbers reflect a period of recalibration, the broader narrative remains encouraging. The GTA market is not contracting; it is normalizing. The combination of moderating rates, strong employment, disciplined supply, and persistent demand signals a stable foundation for renewed activity as 2026 progresses.
For buyers, this environment presents opportunity.
For sellers, price stability is emerging.
For investors, the long‑term fundamentals remain as strong as ever.
The GTA continues to stand as one of North America’s most dynamic and resilient real estate markets—and 2026 is shaping up to be a year where balance returns and confidence rebuilds.
