The Big Picture (The “Pressure Point”)
Downtown Toronto is at a turning point, not a crash point.
The market is being shaped by three forces:
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High population growth
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Persistent housing shortages
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Affordability pressure, not collapsing demand
This creates an opportunity for prepared buyers and strategy requirements for sellers
2026-MYIR_flattened
For Buyers: Why January 2026 Matters
1. You Have More Choice — and More Leverage
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Inventory levels are higher than the last few years, especially in condos and townhomes
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Buyers are no longer rushing; negotiations matter again
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First-time buyer interest has rebounded strongly, particularly in the City of Toronto
What this means:
Well-priced homes sell. Overpriced homes sit.
2. Prices Are Stabilizing — Not Free-Falling
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TRREB forecasts average GTA prices between $1.0M–$1.1M in 2026
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Most price softening already occurred in 2024–2025
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Early 2026 is expected to resemble early 2025, with gradual improvement later in the year
Downtown takeaway:
This is a window, not a bottom-picking exercise.
3. Condos Remain the Entry Point
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Condo apartment prices declined modestly year-over-year
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Rental demand remains strong due to immigration and delayed homeownership
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Downtown condos benefit most from employment, transit, and lifestyle density
For Sellers: The Market Has Changed — Strategy Matters
1. Buyers Are Selective (and Informed)
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Buyer intentions are lower than pandemic peaks, but more serious
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Homes that are priced correctly sell faster
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Homes that “test the market” get ignored
Seller reality check:
Pricing and presentation matter more than they have in years.
2. Detached & Low-Rise Homes Still Win Downtown
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Scarcity of ground-oriented housing remains a structural issue
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Multiplex zoning changes may add supply over time, but not immediately
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Larger lots and redevelopment-friendly properties hold long-term value
3. Expect a Two-Speed Market
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Well-priced, well-located homes → strong interest
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Overpriced or compromised properties → longer days on market
There is no “average” sale anymore.
Rentals, Immigration & Downtown Demand
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Immigration continues to support strong downtown rental demand
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Many households rent longer due to affordability gaps
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Purpose-built rentals and investor condos are adding supply, but absorption remains healthy
Investor takeaway:
Cash-flow pressure is short-term; long-term demand remains intact.
What This Means for Downtown Toronto in 2026
This is not a boom market.
This is not a bust market.
This is a strategy market.
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Buyers who are prepared can negotiate well
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Sellers who are realistic can still achieve strong outcomes
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Downtown Toronto remains one of Canada’s most resilient real estate ecosystems
Bottom Line (In Plain English)
Buyers:
✔ Less competition
✔ More choice
✔ Real negotiating power
Sellers:
✔ Serious buyers are still there
✔ Pricing must be right
✔ Professional strategy matters more than ever
Source
Toronto Regional Real Estate Board (TRREB), 2026 Market Outlook & Year in Review – The Pressure Point
