Has the Return-to-Office Trend Changed the Game for Toronto Buyers?

Happy New Year! Welcome to the first Mortgage Minute of 2026.

If you’re planning to buy a home in Toronto this year, three major developments from the last few weeks should be on your radar. Let’s break them down.

1. Return-to-Office is Reshaping the Market

Canada’s major banks enforced four-day office weeks back in September, and many companies are following suit. The impact is now showing up in the numbers.

Downtown Toronto office leasing hit its strongest quarter since 2018. The best buildings downtown are nearly fully leased.

The question for buyers: If you’re working downtown four days a week, does living in the suburbs still make sense?

For years, the pandemic shifted the calculus. Remote work made suburban living attractive—more space, lower prices, better value. But if you’re commuting downtown four times a week, that two-hour daily round trip starts to add up. Gas, GO Train costs, time away from home—it all matters.

This doesn’t mean downtown is automatically the right choice for everyone. But it does mean location strategy matters more than it has in years.

2. Toronto’s Condo Crisis Deepened

Last year, condo sales dropped 30%. Prices fell 3% to 5%. Properties are sitting on the market for six months or more.

For investors and sellers, this is tough news. But for first-time buyers, this is creating the best negotiating position Toronto has seen in years.

If you’ve been priced out of the condo market or frustrated by bidding wars, 2026 might be your window. Sellers are motivated. Inventory is sitting. And buyers finally have leverage.

This doesn’t mean condos are “cheap”—Toronto is still Toronto. But it does mean the power dynamic has shifted, and smart buyers can take advantage.

3. Rates Are Creating Opportunity on Both Sides

Government of Canada bond yields stabilized around 2.9%. That’s down from the 3.25% we saw early last year, which means fixed rates have room to stay competitive.

What does this mean for you? If you’re considering a fixed-rate mortgage, the environment is favorable. Rates aren’t at pandemic lows, but they’re significantly better than they were 12 months ago.

And on the variable side, Prime Rate fell from 5.45% at the beginning of 2025 to 4.45% by the end of the year. That’s a full percentage point drop for variable rate mortgages.

Translation: Both fixed and variable rate mortgages are in a better place than they’ve been in a while. The question isn’t “which rate is lower?”—it’s “which strategy fits your situation?”

Bottom Line: 2026 is About Strategy, Not Just Affordability

Where you buy matters as much as what you can afford.

Should you be looking downtown or in the suburbs? Fixed or variable?

The answer depends on your work situation, your commute, your lifestyle, your risk tolerance, and your long-term plans.

Let’s figure out what makes sense for YOUR situation.

Sources:

• “Office sector poised for ‘year of rebound’ in 2026 as firms expand, end remote work” – Canadian Mortgage Trends News, December 29, 2025
• “Banks’ four-day office mandate drives new demand in Toronto’s commercial real estate market” – Canadian Mortgage Professional, September 25, 2025
• “Toronto condo market crisis deepens as investors and landlords feel the burn” – Canadian Mortgage Professional, May 13, 2025
• Government of Canada 5-Year Bond Yield data – MarketWatch, January 2026
• Prime Rate 2025 data – Bank of Canada