Is This the Bottom? Toronto’s Housing Market Posts Worst Year Since 2000

Your Mortgage Minute for January 9, 2026

We’re now in the most buyer-friendly Toronto market in a generation. Only half of homes listed last year actually sold. The condo sector is in outright collapse. And if you’re planning to buy or refinance this year, here’s what you need to know about how these market dynamics affect your mortgage strategy.

Only Half of Toronto Listings Sold Last Year

Let’s start with the headline number: Only 53% of homes listed in 2025 found buyers.

According to HouseSigma, out of 110,564 unique properties brought to market in the Greater Toronto Area, 52,426 did not sell. That means nearly half of all listings either expired, were terminated, or are still sitting on the market as we enter this year.

Total sales for 2025: 62,433 homes – the lowest level since 2000 and less than half the peak seen in 2021.

The numbers from December continued the downward trend:

Sales fell 8.9% year-over-year to 3,697 transactions
Average price dropped 5.1% to $1,006,735
Days on market climbed to 87 days – the highest since tracking began in 2016
New listings edged up 1.8% even as sales fell
For the full year, average prices fell 4.7% to $1,067,968 while new listings surged 10.1%.

What this means for your mortgage: This is objectively the most buyer-friendly market Toronto has seen in a generation. You have:

More time to arrange financing without pressure
Serious negotiating leverage on price
Motivated sellers who’ve been on the market for months
Less competition from other buyers
If you’ve been sitting on the sidelines waiting for “the right time,” the data suggests this might be it.

The Condo Market is in Freefall

While the overall market is weak, the condo sector is experiencing an outright collapse.

New construction sales:

• November saw only 165 new condos sold across the entire GTA
• That’s 92% lower than the 10-year average
• Down 40% compared to November 2024

What this means for your mortgage: If you’re thinking about buying a condo:

• Don’t catch a falling knife – Prices are still falling, so timing matters
• Get pre-approved now – Understand what you can actually carry
• Focus on quality – Smaller units are struggling in the current market
• Think long-term – Wait for stabilization signals before jumping in

The condo market will likely remain weak through early 2026, with healthier conditions potentially emerging later in the year.

Property Taxes Going Up (But Less Than Before)

Toronto City Council has proposed a 2.2% property tax increase for 2026, broken down as:

0.7% increase to residential property tax
1.5% increase to the City Building Fund
This is the lowest proposed increase since 2020 and dramatically lower than:

2025: 6.9% increase
2024: 9.5% increase
The proposed budget still needs to go through the approval process, with a final vote expected in February.

What this means for your mortgage: Property tax increases affect your Total Debt Service (TDS) ratio when qualifying for a mortgage.

If you’re getting pre-approved right now, make sure your mortgage agent accounts for the likely tax increase in your qualification calculations. Otherwise, you might qualify for less than you think when the increase takes effect.

The Bigger Picture: Consumer Confidence

Here’s something that doesn’t show up in the statistics: Housing has fallen down Canadians’ priority list.

According to Nanos Research, concerns over jobs and the broader economy have surged to the top of the national agenda, pushing housing affordability down the list.

As Jason Mercer, TRREB’s chief information officer, explained: “GTA households must be confident in their employment situation before committing to long-term monthly mortgage payments, even in this more affordable market.”

Economic uncertainty around trade policy and broader stability are keeping buyers cautious, even as affordability has improved.

This is a Transition Year

We’re in what economists are calling a “transition year.” Prices have dropped significantly (down 20%+ from peak in some segments), inventory remains elevated, and buyers have leverage they haven’t had since the early 2010s.

But buyers are still cautious – and they have reason to be.

That said, if you have:

• Stable employment
• A solid down payment (at least 10-15%)
• A clear timeline to buy
• The ability to carry your mortgage payment

This is objectively one of the best buyer’s markets Toronto has seen in decades.

The question isn’t whether the market will recover – it will. The question is whether you want to buy when you have negotiating power, or wait until everyone else gets confident and competition returns.

For the condo market specifically: Wait for stabilization signals before jumping in. When new construction sales start recovering (likely mid-2026), that’s your indicator.

What Should You Do?

If you’re thinking about buying or refinancing this year:

1. Get pre-approved with 2026 rates and taxes – Understand your true buying power
2. Don’t rush – You have time and leverage; use it
3. Focus on structure, not just rate – Prepayment options and portability matter
4. Avoid the condo knife – Wait for stabilization before buying condos