Death spiral of Toronto's real estate market continues as sales plummet

Toronto's real estate market continued its death spiral of plummetting sales in October, and experts are pointing to uncertainty around inflation, borrowing costs and the economy as reasons buyers remain on the sidelines.

The Toronto Regional Real Estate Board (TRREB) released its October figures on Wednesday, revealing the continued decline of home sales in the region. 

Just over 5,600 home sales were logged across the Greater Toronto Area (GTA) last month, a 7.9 per cent year-over-year dip compared with figures from the previous October. However, things look a bit less grim when sales are weighted on a seasonally adjusted basis, with October 2026 home sales rising month-over-month compared to September.

TRREB President Daniel Steinfeld is hopeful that the market could recover "If a Canada-U.S. trade deal is reached," saying that a resolution of the trade dispute would give GTA residents "a clearer picture of the economic outlook."

"Combined with a resolution to the conflict in the Middle East, this could help ease concerns about inflation and economic uncertainty, strengthen consumer confidence and renew interest in homeownership as we move into 2027," said Steinfeld.

The decline of home prices held steady in October, with benchmark prices falling 4.3 per cent year-over-year, while the average selling price of a GTA home dropped by 2.7 per cent to $1,024,108.

Again, there is more reason for optimism among homeowners and investors when looking at month-over-month figures, where both the October benchmark price and average selling increased slightly over September.

"GTA homebuyers continued to benefit from substantial negotiating power on price over the past year," said TRREB Chief Information Officer Jason Mercer.

"While borrowing costs have increased on the back of higher inflation, the impact on monthly mortgage payments has been mitigated by lower selling prices, helping keep affordability in check," said Mercer.

Dwindling supply doesn't seem to be having much upward pressure on home prices either, as new listings in October fell to 14,173, a decline of 11.9 per cent compared to the previous October.

"While we continue to experience shorter-term volatility in the ownership housing market, we can't lose track of the fact that the permanent population will continue to grow in our region," said TRREB CEO John DiMichele.

"Policy announcements, including HST rebates and development charge reductions should help bring a greater diversity of ownership and rental supply online in the medium-term to ensure new families are properly and affordably housed," added DiMichele.