GTA Housing Market Forecast: Further Price Declines Expected in First Half of 2026
The Toronto Regional Real Estate Board (TRREB) has released its 2026 outlook, indicating that the Greater Toronto Area housing market has reached a significant pressure point. According to the report published on Wednesday, population growth combined with ongoing affordability challenges underscores the urgent need for more diverse housing options across the region.
Market Predictions and Price Trends
TRREB forecasts that home prices in the GTA will continue to decline through the first half of 2026. The board specifically anticipates year-over-year price decreases in the mid-to-high single digits during this period. For the entire year, TRREB projects that the average price for all home types will range between $1 million and $1.03 million, with approximately 60,000 to 70,000 properties expected to change hands.
The report suggests that if consumer confidence improves in the latter half of 2026, increased sales activity and tighter market conditions could lead to a stabilization of selling prices. However, the immediate outlook remains focused on continued downward pressure on home values.
Improved Affordability and Increased Inventory
TRREB notes that affordability in the GTA improved throughout last year as average prices decreased across multiple housing categories, including detached homes, semi-detached properties, condominiums, and townhouses. Simultaneously, active listings have risen substantially and remain historically high across all housing segments.
This combination of factors creates what TRREB describes as substantial choice for prospective homebuyers. The board emphasizes that this increased inventory translates directly into greater negotiating power for buyers and ultimately contributes to lower selling prices throughout the market.
First-Time Buyers and Market Dynamics
An Ipsos survey commissioned by TRREB reveals that 45% of individuals planning to purchase property in 2026 will be first-time buyers. This significant segment of the market indicates continued demand despite affordability challenges.
However, the survey also identifies a substantial gap between what buyers can afford and current market realities. The research shows a $589 monthly difference between affordable mortgage payments and the actual payments required for the types of homes buyers desire. This discrepancy, coupled with negotiating power in the rental market, may lead many households to remain in rental accommodations for longer than initially anticipated.
Housing Diversity and Future Solutions
TRREB President Daniel Steinfeld emphasized the importance of housing diversity in addressing current market challenges. Multiplexes, townhomes, and other forms of missing-middle housing offer attainable choices for families, newcomers, and people looking to right-size, Steinfeld stated in the report. He further noted that purpose-built rental properties remain a core component of a healthy housing system.
The board's outlook suggests that addressing the housing crisis requires not only market adjustments but also strategic development of diverse housing options that meet the needs of Toronto's growing and changing population.
