For the first time since 2021, the average price of homes in the Toronto area has dipped below the $1 million mark, signaling a significant shift in the real estate landscape. This change comes as both Toronto and Vancouver continue to experience a downturn in housing prices and sales volumes, leading experts to predict a slow start for the housing market in the first half of 2026.
Currently, the average selling price for a home in Toronto stands at $973,289, reflecting a 6.5 percent decline from January 2025, according to the statistics released by the Toronto Regional Real Estate Board (TRREB) on Wednesday. This drop effectively reverses much of the housing market gains seen during the pandemic. In the Greater Toronto Area (GTA), the average price for a detached home has also decreased, falling by 7.4 percent to approximately $1,277,915.
On the West Coast, the situation mirrors that of Toronto, with Metro Vancouver’s home price index falling to $1.1 million. This translates to a 5.7 percent decrease compared to January 2025 and a modest 1.2 percent drop from December, as reported by Greater Vancouver Realtors.
John Pasalis, the president of Realosophy Realty, commented on the situation, stating, "We’ve basically lost five years of value. We’re back to a late 2020 pricing era." This sentiment echoes the experiences of many buyers and sellers grappling with the current market conditions.
The volume of home sales has also witnessed a significant drop. In the Greater Toronto Area, transactions plummeted by 19 percent year-over-year, amounting to just 3,082 sales. Similarly, Metro Vancouver saw a staggering 28 percent decline, with only 1,107 residential sales recorded.
Analysts attribute the ongoing decline in prices to a lack of buyer confidence, which has been affected by various factors such as a strained trading relationship with the U.S. and broader economic concerns. Despite improvements in housing affordability due to lower interest rates and decreasing home prices, consumer sentiment remains pessimistic.
A recent poll conducted by Ipsos for TRREB revealed that only 22 percent of participants plan to purchase a home in 2026, down from 27 percent the previous year. Jason Mercer, TRREB’s chief information officer, noted, "We haven’t seen any marked movement of households back into the marketplace," suggesting that the sluggish activity is likely to persist through the first half of 2026. However, he is hopeful that positive economic developments later in the year could encourage buyers to re-enter the market.
Looking ahead, TRREB predicts that the average selling price for a GTA home in 2026 will range between $1 million and $1.03 million, indicating a slight recovery compared to current figures. This outlook is more optimistic than that of the Canadian Real Estate Association, which foresees a 4.5 percent drop in Toronto real estate prices for the same year.
In contrast, Greater Vancouver Realtors expect their market to remain stagnant throughout 2026. Andrew Lis, GVR's chief economist, acknowledged a backlog of eager buyers who are waiting for the right moment to make a purchase but indicated that the timing of their return to the market remains uncertain.
Pasalis believes that restoring consumer confidence in Toronto would require a renewal of the United States-Mexico-Canada Agreement. He notes that even if there’s a resurgence in buyer activity, it may only stabilize prices rather than drive them back up.
He highlighted a dramatic shift in how fear influences real estate decisions. During the pandemic, fear caused many buyers to rush in and purchase homes at inflated prices. Now, however, a prevailing anxiety about maintaining property values has led to an opposite reaction, driving prices down further than perhaps warranted. "The overriding sentiment is anxiety and uncertainty, and people just aren’t in a rush to make a decision," he explained.
