As December 2025 numbers came in, they did more than close out a month. They closed out a year that will be remembered as one of the slowest real estate sales years Toronto has seen in decades. While price declines often dominate the conversation, the more important story lies in how different segments of the market behaved and what that means heading into 2026.
Across the Greater Toronto Area, average prices finished the year down roughly five percent year over year, settling close to the one-million-dollar mark. Inventory remained elevated, with active listings up significantly compared to previous years, while sales volumes stayed muted. On the surface, this suggests a balanced market, but averages can be misleading.
When the data is separated by property type and location, the picture becomes clearer. In the City of Toronto, detached homes stood out as the only segment with rising sales, increasing by about ten percent compared to last year. This growth came despite lower prices, which suggests buyers are taking advantage of improved affordability in premium neighbourhoods. Semi-detached homes and townhouses saw fewer transactions, while condos continued to face pressure from higher supply and softer demand.
The condo market, in particular, tells an important story. While sales slowed toward the end of the year, inventory dropped sharply from mid-year highs. Many units that did not sell appear to have transitioned into rentals, helping stabilize pricing and reduce months of inventory. This shift highlights how sellers are adapting rather than exiting the market altogether.
Another critical comparison is to the peak of early 2022. Average prices across the GTA are now roughly twenty-five percent below those highs. Benchmark pricing shows similar declines across all property types, reinforcing how materially conditions have changed over the past four years. At the same time, interest rates are lower than they were one year ago, improving purchasing power for some buyers and helping explain renewed activity in select segments.
Seasonality also plays a role. December typically sees fewer high-quality listings, particularly for detached homes. Early signs from January suggest more properties are coming to market as sellers who waited through the holidays re-enter. This could increase competition in the spring, particularly if inventory continues to rise faster than sales.
For buyers, preparation will be key in 2026. Well-priced, high-quality properties in desirable areas are still selling quickly, often within the first week. For sellers, timing and pricing strategy matter more than ever, especially as competition builds later in the year.
The takeaway from 2025 is not simply that the market slowed, but that it reset. Entering 2026, the data points to a market that rewards informed decisions, realistic expectations, and early planning. Understanding these dynamics now can help both buyers and sellers navigate the year ahead with greater confidence.
Across the Greater Toronto Area, average prices finished the year down roughly five percent year over year, settling close to the one-million-dollar mark. Inventory remained elevated, with active listings up significantly compared to previous years, while sales volumes stayed muted. On the surface, this suggests a balanced market, but averages can be misleading.
When the data is separated by property type and location, the picture becomes clearer. In the City of Toronto, detached homes stood out as the only segment with rising sales, increasing by about ten percent compared to last year. This growth came despite lower prices, which suggests buyers are taking advantage of improved affordability in premium neighbourhoods. Semi-detached homes and townhouses saw fewer transactions, while condos continued to face pressure from higher supply and softer demand.
The condo market, in particular, tells an important story. While sales slowed toward the end of the year, inventory dropped sharply from mid-year highs. Many units that did not sell appear to have transitioned into rentals, helping stabilize pricing and reduce months of inventory. This shift highlights how sellers are adapting rather than exiting the market altogether.
Another critical comparison is to the peak of early 2022. Average prices across the GTA are now roughly twenty-five percent below those highs. Benchmark pricing shows similar declines across all property types, reinforcing how materially conditions have changed over the past four years. At the same time, interest rates are lower than they were one year ago, improving purchasing power for some buyers and helping explain renewed activity in select segments.
Seasonality also plays a role. December typically sees fewer high-quality listings, particularly for detached homes. Early signs from January suggest more properties are coming to market as sellers who waited through the holidays re-enter. This could increase competition in the spring, particularly if inventory continues to rise faster than sales.
For buyers, preparation will be key in 2026. Well-priced, high-quality properties in desirable areas are still selling quickly, often within the first week. For sellers, timing and pricing strategy matter more than ever, especially as competition builds later in the year.
The takeaway from 2025 is not simply that the market slowed, but that it reset. Entering 2026, the data points to a market that rewards informed decisions, realistic expectations, and early planning. Understanding these dynamics now can help both buyers and sellers navigate the year ahead with greater confidence.
