Will Toronto Home Prices Fall or Rise in 2026? A Data-Driven Outlook
As we move into 2026, one question dominates conversations among homeowners, buyers, and investors alike: will Toronto home prices fall further, stabilize, or begin rising again?
Rather than relying on predictions or headlines, the most reliable way to answer this is by analyzing what the latest confirmed market data already shows. The December 2025 Toronto Regional Real Estate Board (TRREB) Market Watch report provides a complete, audited snapshot of pricing, inventory, selling timelines, and negotiation behaviour across Toronto and the GTA.
That data does not give us certainty—but it does give us directional clarity.
The December 2025 Market Baseline
December 2025 represents the most recent full dataset available as we enter early 2026. Importantly, market conditions do not reset on January 1. Inventory, buyer psychology, and pricing momentum carry forward, especially during the winter months.
GTA-Wide Market Snapshot (December 2025)
Based on the data you provided, the GTA recorded:
Sales: 3,697
Average price: $1,006,735
Active listings: 17,005
Months of inventory (MOI): 4.9
Sale-to-list price ratio (SP/LP): 97%
Average LDOM: 41 days
Average PDOM: 65 days
MLS HPI composite benchmark: $942,300 (-6.30% year-over-year)
These figures describe a market that is functioning, but no longer driven by urgency or speculation.
Toronto Prices in Context: Softer, But Not Collapsing
Within the City of Toronto, price declines were present but less severe than the broader GTA, suggesting relative resilience in the core.
December 2025 MLS HPI benchmarks for Toronto show:
Composite benchmark: $934,800 (-4.33% YoY)
Detached benchmark: $1,465,600 (-5.43% YoY)
Apartment benchmark: $573,600 (-6.87% YoY)
This matters because price direction is rarely uniform. Toronto is already displaying a more defensive profile compared to outlying areas, particularly in established neighbourhoods and well-located freehold homes.
The Most Important Signal for 2026: Inventory and Negotiation
Price forecasts ultimately hinge on one structural question:
Does the market tighten fast enough to restore seller leverage—or remain loose enough to keep buyers in control?
The December data leans clearly toward the latter.
Key indicators include:
17,005 active listings, a high level by recent standards
MOI at 4.9, signalling a balanced-to-buyer-leaning market
LDOM and PDOM are both elevated, meaning homes take longer to sell
SP/LP below 100%, confirming negotiation is normal, not exceptional
These are not the conditions that typically precede rapid price appreciation.
Condos: The Pressure Valve of Toronto Pricing
One of the most important insights in the December dataset is the role of condos.
Condo apartment statistics show:
6,169 active listings
Average LDOM: 46 days
SP/LP ratio: 96%
Historically, condos act as the pressure valve of the Toronto market. When condo inventory is high and negotiations are common, it becomes difficult for overall prices to surge, even if certain freehold segments perform well.
Unless condo absorption improves meaningfully, broad-based price acceleration across Toronto remains constrained.
What Would Need to Happen for Prices to Rise in 2026?
A sustained price increase would require multiple conditions aligning, not just one.
1. Inventory must tighten
Active listings would need to decline consistently, pushing MOI lower and increasing competition among buyers.
2. Selling timelines must shorten
Falling LDOM and PDOM would indicate urgency in returning to the market.
3. Negotiation must fade
SP/LP ratios would need to move closer to, or above, 100% across most segments.
As of December 2025, none of these conditions are firmly in place.
What Could Push Prices Lower?
Further price softening becomes more likely if:
Inventory remains elevated into the spring market
Condo supply continues to outpace demand
Sellers chase the market with price reductions
In that scenario, averages and benchmarks can drift lower even without a sharp economic shock.
The Most Likely Scenario: A Two-Speed Market in 2026
Based on the December data, the highest-probability outcome is neither a crash nor a rebound—but a two-speed market.
Holding up better:
Well-located freehold homes
Turnkey properties
Scarcity-driven neighbourhoods
Correctly priced listings
Remaining under pressure:
Condo apartments with high inventory
Properties requiring updates
Homes priced based on past peak expectations
This pattern is already visible in the data and is likely to persist unless market structure changes materially.
What This Means for Buyers
For buyers in 2026, the advantage is not simply lower prices—it is market structure.
The data confirms:
More choice
More time to decide
More room to negotiate
Fewer emotionally driven bidding situations
This is particularly true in the condo segment, where inventory and selling timelines strongly favour patient, well-prepared buyers.
For a detailed buyer guide, see:
“GTA Buyer Guide 2026” → https://torontobased.com/blog.html/gta-buyer-guide-2026-8918579
What This Means for Sellers
For sellers, the lesson from December 2025 is clear: strategy matters more than optimism.
With elevated inventory and negotiation now standard, successful sellers in 2026 will be those who:
Price correctly from day one
Prepare homes to outperform competing listings
Understand their micro-market, not just GTA averages
For deeper insight, see:
“Seller Pricing Strategy in 2026” → https://torontobased.com/blog.html/why-pricing-strategy-matters-more-than-ever-in-2026-8918585
What to Watch Next (Without Guessing Numbers)
To assess price direction through 2026, watch for trend changes, not predictions:
Are active listings falling month-over-month?
Is MOI trending lower?
Are selling timelines shortening?
Is SP/LP moving closer to 100%?
Are condos absorbing inventory faster?
Those signals—not headlines—will determine whether prices stabilise or rise.
External References (Context Only)
TRREB Market Watch definitions and methodology: https://trreb.ca
Bank of Canada monetary policy framework: https://www.bankofcanada.ca
CMHC housing supply and affordability research: https://www.cmhc-schl.gc.ca
Final Takeaway: Will Toronto Prices Fall or Rise in 2026?
Based on December 2025 data, Toronto’s outlook for 2026 is best described as conditional stability.
Prices are unlikely to surge without tighter inventory and faster sales. At the same time, a sharp decline would likely require prolonged oversupply or deteriorating confidence. The most probable outcome is a market where quality, pricing discipline, and location matter more than ever.
For buyers, this is a market of opportunity.
For sellers, it is a market that rewards preparation.
🏡 Thinking of Buying, Selling, or Investing in the GTA?
Don’t guess—use real data, real listings, and expert guidance.
🔍 Start Exploring Now (Live Search Portals)
👉 Gas Stations for Sale
👉 Commercial & Industrial Properties
👉 Residential Homes Across the GTA
👉 Hotels & Motels – Investment Opportunities
👉 Pre-Construction Condo Projects
👉 Condo Resale Listings (GTA)
📈 Market is shifting—smart investors move early.
📊 Latest Market Insights (Updated Monthly)
✔️ Renting vs. Owning: How $2,500/month could cost you $190,000
✔️ GTA Housing Market — Dec 2025
✔️ Mississauga Condo Market — Q3 2025
✔️ Durham Region Market Report — Oct 2025
✔️ Bill 60 vs Ontario RTA — What’s Changing?
👉 Read more market reports & analysis →
📩 Need Clarity Before You Move?
Get straight answers, not sales pressure.
Sami Chowdhury | Broker
📧 samichy@torontobase.com
🌐 torontobased.com | torontobase.ca
Let’s turn market uncertainty into opportunity.