Toronto Real Estate Market Update — February 2026

January 2026 Toronto Market: A New Reality Below $1M

Even through past corrections, prices had stayed above that line — until now. That said, December and January are always quieter months, so the real story will unfold in spring. But when you combine falling prices with rising inventory especially in the condo market, it’s clear that buyers are gaining real leverage in many segments.

This combination tells us the market isn’t overheating but it isn’t collapsing either. It’s selective. Not every property is equal. This is no longer a market where you can test a high price and hope for the best.

Inventory Tells the Real Story

In neighbourhoods like the Beaches, Roncesvalles, and the Junction, good semis are still getting multiple offers. One freehold townhouse at 242 Delaware Ave recently received 19 offers and sold for $1.327M — I was expecting $1.23–1.24M, but demand changed the story. That strategy only works in the right pockets and definitely not in most condo buildings.

The Condo Market: Still Challenging

Condos remain the weakest segment. With over seven months of inventory, fewer than 15% of listings are selling each month. That means most units sit unless they’re priced properly.

Larger, end-user-focused condos — especially 2-bed, 2-bath units with parking — are still moving. Smaller one-bedroom units with no parking are struggling. Many buyers now won’t even consider listings without parking. If you’re buying a condo in 2026, this is a negotiation market. But don’t expect fast appreciation — in some segments, prices may still soften.

This is no longer a market where you can “test” a high price. The strategy today: strong marketing, realistic pricing, and quick adjustments when needed. If a listing doesn’t get traction in the first 30 days, the market is usually telling you something.

Big headlines talk about averages and milestones like prices dropping below $1M — but what really matters is your micro-market. What sold in your building? On your street? In your neighbourhood in the last 60–90 days? That’s what determines value today.

Mortgage Basics Every Toronto Buyer Should Understand

Getting a mortgage isn’t just about finding the lowest rate. It’s about choosing the right product, understanding penalties, and knowing how the process actually works. Small misunderstandings can turn into expensive mistakes.

Your pre-approval is NOT a blank cheque.

When a bank pre-approves you for $800K, they’re approving you — your income, your debts, your stability. They’re not approving the property. If you offer $800K but the bank’s appraiser says the home is worth $750K, the bank will only lend based on $750K. You owe the $50K difference in cash. Painful. Avoidable. And more common than people realize.

Fixed vs. variable: what actually matters right now.

Fixed rates follow the bond market, not the Bank of Canada. Variable rates follow the overnight rate. Right now, most buyers are choosing 3–5 year fixed terms because certainty matters in an uncertain environment. The spread is relatively small — usually under half a percent — and stability has real value when you’re making a 25-year commitment.

Bonus insight: less than 20% down isn’t always worse.

If you put less than 20% down, you pay mortgage insurance — which protects the lender, not you. But here’s the twist: insured mortgages sometimes get lower interest rates because the bank’s risk is covered. So don’t assume 20% down is always the smartest or cheapest option. Sometimes less actually works in your favour. Talk to a mortgage broker before assuming.

Buyers Looking Right Now — Could You Be Their Match?

These buyers are ready, qualified, and specific. If you’re thinking of selling — or know someone who might be — one of these could be your perfect match.