Some years are easier to predict than others. In many ways, 2026 is surprisingly straightforward; in others, it remains frustratingly unclear. What makes forecasting Toronto real estate in 2026 “easier” is what we already know from 2025. What complicates the picture is how the broader economy—and the world—chooses to unfold over the next twelve months.

Uncertainty is built into 2026. There may be unexpected plot twists, or this could simply be a year of consolidation after a period of retreat. With that in mind, here’s what I believe the Toronto real estate market is likely to deliver in 2026.

No Sudden Movements: No Big Rebound, No Dramatic Collapse

The debate continues over whether Toronto has already reached the bottom of the market or still has room to soften. My view is that we’ll see increased activity in 2026, but price movement will largely depend on economic confidence and how Canada’s trade relationship with the U.S. evolves.

With CUSMA up for review in July 2026, expect a noticeable “wait-and-see” mentality, particularly in the first half of the year. That mid-year period could either deepen uncertainty or restore confidence. If clarity emerges, we could see a meaningful lift in market sentiment. If not, prices are more likely to remain range-bound or soften further. Either way, dramatic swings are unlikely.

From Mountain to Molehill: Interest Rates Matter Less Than They Used To

There was a time—not long ago—when Torontonians watched every rate announcement as though their financial future depended on it. Interest rates were the lever that halted the market’s upward momentum and forced a reset.

In 2026, that lever has far less power. Interest rates no longer pull the puppet strings of Toronto real estate, and any movement—if it happens at all—is likely to be limited. More importantly, rates are no longer the primary driver of buyer behaviour or price direction. They still have role. Just not as big as it was a few years ago.

The Americans Are Coming (But Not to Invade)

Even with a federal foreign buyer ban in place—along with a foreign buyer tax at the federal and municipal level—interest from Americans continues to stand out. In fact, I’ve had more Americans reach out in 2025 than in any other year of my career.

This is particularly notable because this is one of the most restrictive periods in decades for foreign buyers. While there are exemptions, both the ban (currently in place until 2027) and the foreign buyer tax create meaningful friction. Yet they don’t appear to be deterring American interest.

Many of these buyers aren’t looking to invest remotely; they’re exploring pathways to live and work in Canada. Immigration routes tied to academia, healthcare, medicine, and technology continue to attract Americans who see Toronto as a stable, long-term alternative. This is not a surge, and existing policies will keep numbers contained—but the persistence of this demand, despite heavy restrictions, is worth watching.

The Inventory Story: More Choice Without the Pressure of Fast Rising Prices

The defining feature of 2025 was rising inventory, and that reality carries into 2026. Inventory levels are likely to remain elevated across much of Toronto, particularly in the condo market. While we may see modest fluctuations, the broader theme is stability at higher levels, not a rapid drawdown.

Smaller condos remain the most challenged segment. Investors are unlikely to return in large numbers, though select long-term investors may view 2026 as an entry point—provided they’re prepared for patience rather than quick gains.

What’s different for buyers is choice. For the first time in decades, buyers are operating in a market with depth, selection, and time. As a result, I suspect transaction volume may start to come down, but that does not automatically translate into rising prices.

Construction Dysfunction: The Cost of Standing Still

Like 2025, condo construction in 2026 will remain subdued. We may see fewer projects cancelled or pushed into receivership, but new pre-construction launches will be rare. High construction costs, supply chain uncertainty, and sale prices that don’t support profitability will continue to stall development.

Tariff tensions and global supply chain realignments may further test the system. While some proposals may move forward, very few are likely to reach the sales stage in any meaningful way.

The exception remains purpose-built rentals. Many stalled condo projects have pivoted toward rental housing, adding supply to that segment—but doing little to increase ownership options.

The Quiet Conclusion: A Market Pausing, Not Healing

At first glance, Toronto doesn’t appear short on housing in 2026. Inventory is higher, buyers have options, and price growth is restrained. But this surface-level balance masks a deeper structural issue.

While the market pauses, construction remains largely sidelined. The housing pipeline is not being replenished. When confidence eventually returns—and it always does—demand will re-emerge long before supply is ready to meet it.

2026 won’t be remembered as a boom year or a bust year. It will be remembered as a year of restraint, recalibration, and quiet positioning. For buyers, it’s a market that is easier to enter than most years, but how easy may depend on what you want to buy. For sellers, realism matters more than optimism. This market is great for a move-up buyer who may have received a higher price for the property a few years ago than 2026, but who will benefit for the lower price on the bigger buy side.  And for Toronto as a whole, 2026 may be the year that inventory shores up and starts to come down, but still distracts us from the housing shortage still forming beneath it.