Toronto Home Prices Fall Below $1 Million for First Time Since 2021
In a notable shift, Toronto’s average home price has fallen below the $1 million threshold for the first time since 2021. In January, the average selling price was reported at $973,289, reflecting a 6.5% decrease compared to January 2025. This decline signifies a significant retreat from the housing market highs witnessed during the pandemic.
Current Trends in the Toronto Housing Market
The drop in prices is part of a broader trend affecting Canada’s two largest housing markets, with predictions of continued sluggishness into the first half of 2026. According to the Toronto Regional Real Estate Board (TRREB), the average price of detached homes in the Greater Toronto Area (GTA) has also decreased, now at $1,277,915—down 7.4% year-over-year.
- Average selling price in Toronto: $973,289
- Average price of detached homes in GTA: $1,277,915
- Sales volume in GTA: 3,082 transactions, a decline of 19%
- Residential sales in Metro Vancouver: 1,107, down 28%
Factors Influencing the Market
Real estate analysts cite low buyer confidence as a primary factor in the continuing price decline. Concerns about the economy and trade relations with the U.S. have contributed to a cautious sentiment among potential buyers. A recent TRREB poll indicated that only 22% of respondents plan to purchase a home in 2026, down from 27% in 2025.
TRREB Chief Information Officer Jason Mercer anticipates that the sluggish sales will persist at least through the first half of 2026. However, he noted the potential for a market rebound later in the year, contingent on positive economic developments.
Future Predictions for Home Prices
Looking ahead, TRREB forecasts that the average selling price of homes in the GTA for 2026 may range from $1 million to $1.03 million. This prediction is slightly more optimistic than that of the Canadian Real Estate Association, which expects a decline of 4.5% in home prices this year. Meanwhile, the Greater Vancouver Realtors (GVR) predict stagnation in their market throughout 2026.
- TRREB’s forecast for 2026: Average home price between $1 million and $1.03 million
- Canadian Real Estate Association’s forecast: 4.5% decrease in home prices
Market Sentiment and Future Outlook
Experts like John Pasalis of Realosophy Realty highlight a significant shift in buyer psychology. During the pandemic, fear of missing out pushed many to buy hastily, often at inflated prices. Now, a prevailing anxiety about maintaining property values has caused prospective buyers to hesitate.
Pasalis argues that confidence must improve for a true recovery in the housing market. Without a renewal of favorable trade agreements, the return of consumer confidence may remain uncertain. The future of Toronto’s housing prices is still an open question, with market dynamics shifting rapidly.
