A pedestrian passes a home for sale in Toronto on Wednesday. TRREB chief information officer Jason Mercer expects that home sales in the city will remain weak for the first half of 2026.Sammy Kogan/The Globe and Mail
Housing prices and sales volume continued to tumble in January in Canada’s two biggest property markets, as both Toronto and Vancouver’s real estate boards predicted that the first half of 2026 would remain sluggish.
The average selling price for a home in Toronto fell below the $1-million mark for the first time since 2021. The current average of $973,289 is down 6.5 per cent compared with January, 2025, according to Toronto Regional Real Estate Board (TRREB) statistics released Wednesday, representing an erasure of much of the pandemic’s housing rally. The average price of a detached home in the GTA was down 7.4 per cent to $1,277,915.
Meanwhile, Metro Vancouver’s home price index fell to $1.1-million, representing a 5.7-per-cent decrease from January, 2025, and a 1.2-per-cent decrease from December, data from Greater Vancouver Realtors showed.
“We’ve basically lost five years of value. We’re back to a late 2020 pricing era,” said John Pasalis, president of Realosophy Realty.
Sales volume fell by 19 per cent year-over-year to 3,082 transactions in the Greater Toronto Area, TRREB said. Residential sales in Metro Vancouver declined 28 per cent to just 1,107 sales.
Real estate analysts say prices are still dropping because buyer confidence is in the gutter, as Canada deals with a frayed trade relationship with the U.S. and concerns about the economy. That weak consumer sentiment has persisted despite improved housing affordability as interest rates and home prices have dropped over multiple years.
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A poll commissioned by TRREB and conducted by Ipsos found that only 22 per cent of respondents intended to buy a home in 2026, compared with 27 per cent in 2025.
“We haven’t seen any marked movement of households back into the marketplace,” TRREB chief information officer Jason Mercer said.
As a result, Mr. Mercer expects that Toronto sales will remain weak for the first half of 2026. He says there is an opportunity for the market to improve toward the end of the year if buyers start to see positive economic news.
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TRREB forecasts that the average selling price of a GTA home in 2026 will be between $1-million and $1.03-million, a figure that would mark a slight increase from current averages.
It’s a more optimistic outlook than that of the Canadian Real Estate Association, which predicted last month that Toronto real estate prices would drop by 4.5 per cent in 2026.
Meanwhile, Greater Vancouver Realtors (GVR) said that its market will likely remain stagnant throughout 2026.
Andrew Lis, chief economist of GVR, said there is pent-up demand from buyers who have been waiting to make a purchase, but it’s unclear when they’ll enter the market.
“Whether it will happen in 2026 remains an open question,” he said in a news release.
Mr. Pasalis said a renewal of the United States-Mexico-Canada Agreement would need to occur for consumer confidence to return in Toronto.
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However, he expects that any increase in buyer activity will only serve to stop the decline of housing prices. It won’t be enough to actually bring prices back up.
Mr. Pasalis said there has been a major reversal in how fear affects real estate transactions. During the pandemic, fear motivated buyers to rush into purchases at prices that were overinflated.
Today, he said a fear of the market’s ability to hold on to value has had the opposite effect and may have pushed prices unreasonably low.
“The overriding sentiment is anxiety and uncertainty, and people just aren’t in a rush to make a decision,” he said.