May 2026

Market Report

TORONTO & REGION

Toronto Region Market Update, May 2026

There is no question that the Toronto and Region residential resale market continues to improve, but the task is Sisyphean. To some extent the market is dealing with the massive boulders of its past success, and to an even greater extent the bolder of economic uncertainty and insecurity created by the prevailing geopolitical tensions. The fact that the price of oil, which factors into almost all consumer spending, has risen dramatically, is not helpful.

Two components of May’s market data were particularly positive. The number of reported sales, and the length of time that properties remained on the market before selling.

During the month of May 6,583 homes traded hands. This represents a 6.3 percent increase compared to the 6,195 properties reported sold in May 2025. On average these sales took place in only 27 days, only 2 days longer than the same month last year. In January, it took 45 days for all properties (on average) to sell. There was an improvement in February to 36 days, 31 days in March, and a further improvement to 29 days in April. Properties changed hands 40 percent faster in May than at the beginning of the year.

Listing activity remains perplexing. Early forecasts for 2026 had suggested that listing inventory in 2026 would be high, primarily driven by mortgage renewals. Mortgages scheduled for renewal in 2026 were underwritten, for the most part, in 2021. In 2021 the Bank of Canada overnight lending rate was 0.25 percent. It is currently 2.25 percent, unchanged since October 29, 2025. In 2021 five year fixed rates were available for as low as 1.5 percent, and lower for five year variable mortgages. Depending on the lender, five year fixed rates in May were approximately 4.5 percent. Notwithstanding the sharp rise in borrowing cost, most homeowners are “comfortably” coping with higher borrowing costs on renewal, primarily because of the stress test.

Mortgage borrowers in 2021 were forced to qualify for their mortgages based on the prevailing interest rates, plus either using the Bank of Canda benchmark rate (0.25 percent) or the actual mortgage contract rate plus 2 percent, whichever was higher. As a result, most borrowers were qualifying at 3.5 percent or higher. Coupled with increases in wages over this five year period, most homeowners are “comfortably” able to renew their mortgages without being forced to go to market.

Conversely, most homeowners who bought in 2021 are discovering that their properties are valued less today than what they paid five years ago. By year-end 2021 the average sale price for all properties sold was $1,157,000 and substantially higher for detached and semi-detached homes. Due to the Covid-19 exodus from the City of Toronto, home prices in the 905 Region skyrocketed in 2021 and 2022. Detached and semi-detached properties have decreased substantially compared to price decreases in the City of Toronto. The end result is homeowners who might otherwise have considered selling are holding off – they can afford to do so, and in doing so, they are hoping for improved sale prices as the market moves through 2026 and into 2027. Conversely, buyers are also not jumping into the market, waiting until they perceive that the bottom has arrived.

The continued improvement of the resale market has prompted numerous commentators to point out that the resale market is stabilizing and has returned to 2019 numbers, the year before the Covid-19 pandemic. Although improvement has take place, the numbers are both better and much worse than 2019.

In May of 2019 the average sale price was $838,540. It is $1,069,700 today, almost 28 percent higher. Sales on the other hand were 34 percent higher in May 2019 than sales achieved in May of this year. Active listings were lower, and consistently so, because of regular sales absorption. For the reasons set out above, new properties coming to market this May were 9 percent fewer than what came to market in May 2019. The current market is heavy with unsold condominium apartments. In 2019 condominium apartments sold briskly. In May of 2019 2,542 condominium apartments traded hands. This May only 1,535 were reported sold, a decline of 40 percent. Even though condominium apartment sales have declined drastically, average sale prices for condominium apartments achieved in May are still almost 9 percent higher than they were in May of 2019.

Two other pieces of market data should also be remembered. On average all properties in May 2019 sold in 19 days and in only 16 days in the City of Toronto. There were 2.5 months of inventory, and on average all properties sold for 99 percent of their asking price (101 percent in the City of Toronto). Fast forward to May 2026, all properties sold in 27 days, at 98 percent of their asking price, and notwithstanding fewer properties coming to market, the Toronto and Region resale market is coping with 4.8 months of inventory.

The Toronto and Region residential resale market is still recalibrating. Still pushing that Sisyphean bolder up the housing market hill.

Looking towards June and the second half of 2026 we can expect the same year-over-year results. Each month we will see a small improvement over the same month in 2025. Recent positive developments on the geopolitical front, if they continue, may result in an up-tick in year-over-year sales. An end to the middle-east conflict, the opening of the Strait of Hormuz, and lower oil prices will help with buyer and seller confidence. The re-negotiation of the United States-Mexico-Canada Trade Agreement (hopefully with favourable terms for Canada), will also be instrumental in the recalibration of all real estate markets. If all of these non-local factors materialize, we will see more properties coming to market and a much higher number of homes trading hands.

Real Estate Newsletter – July 2026

In This Issue:

How to Budget for Your First Home Without Sacrificing Everything
Learn how to prepare for homeownership while still protecting your lifestyle and financial comfort.
Read More »
Inspection-Proof Your Sale: Get Ready Before Buyers Arrive
Prepare your home before inspections uncover issues that could slow down or weaken your sale.
Read More »
What Is Escrow and Why It Matters for Buyers and Sellers
Understand how money, documents, and transaction safeguards are handled before closing.
Read More »

How to Budget for Your First Home Without Sacrificing Everything

Buying your first home is exciting, but it can also feel financially intimidating. Many first-time buyers worry that homeownership means giving up every comfort, hobby, trip, or personal goal. The truth is that a smart budget is not about eliminating your lifestyle. It is about understanding your full financial picture, making informed choices, and buying a home that supports your future without overwhelming your present.

1. Start With Your Real Monthly Comfort Zone

The amount a lender approves is not always the amount you should spend. A lender looks at ratios, income, debt, and credit. You should also look at your day-to-day life. Consider groceries, transportation, insurance, savings, family needs, entertainment, and personal priorities. The best home budget is not built around the maximum possible mortgage payment. It is built around a payment that allows you to live comfortably after moving in.

2. Separate The Purchase Price From The Cost Of Ownership

First-time buyers often focus mainly on the down payment and mortgage. However, owning a home includes many other costs. Property taxes, utilities, insurance, maintenance, repairs, condo fees if applicable, lawn care, snow removal, and replacement costs all belong in the budget. A home that looks affordable based on the mortgage payment alone may feel expensive once the full cost of ownership is included.

3. Build A Closing Cost Fund Early

Closing costs can surprise buyers who have saved only for the down payment. Depending on the location and type of property, buyers may need funds for legal fees, land transfer tax, title insurance, appraisal fees, inspection fees, adjustments, moving expenses, and initial setup costs. A strong budget includes a separate closing cost reserve so the buyer is not forced to use emergency savings at the last minute.

4. Keep An Emergency Fund After Closing

One of the most important rules for first-time buyers is to avoid becoming house poor immediately after purchase. Moving into a home with no emergency savings can create stress when the first repair appears. Even a newer property can require unexpected spending. A basic emergency fund protects the buyer from relying on credit cards or loans for urgent repairs, appliance replacement, or temporary income disruptions.

5. Plan For The First Year Of Ownership

The first year often includes more spending than buyers expect. Furniture, window coverings, tools, maintenance equipment, paint, small repairs, security systems, and utility setup can add up quickly. Some of these purchases may feel small, but together they can strain the budget. A practical first-year plan helps buyers decide what must be done immediately and what can wait.

6. Avoid Lifestyle Shock

A budget should reflect the life you actually want to live. If travel, dining out, hobbies, family activities, or charitable giving are important to you, include them honestly. Cutting everything to buy a slightly more expensive home can lead to regret. A sustainable budget allows homeownership to improve your life instead of restricting it.

7. Review Debt Before Buying

Credit cards, car loans, student loans, and lines of credit affect affordability. Paying down high-interest debt before buying can improve borrowing power and reduce monthly pressure. Buyers should review debt well before applying for a mortgage so they have time to make improvements. A stronger debt position can lead to better options and more confidence.

8. Work Backward From Your Goals

Instead of asking, “What is the most expensive home I can buy?” ask, “What home fits the life I want over the next five to ten years?” This change in thinking helps buyers balance ownership with savings, retirement planning, family goals, career changes, and lifestyle priorities. Buying your first home should be a step toward stability, not a source of constant pressure.

Conclusion:
A first home should be exciting, not financially suffocating. Buyers who budget carefully can protect their lifestyle while still moving toward ownership. The strongest first-time buyers understand that affordability is about more than approval. It is about comfort, flexibility, and long-term security. With the right plan, you can buy your first home without sacrificing everything that makes your life enjoyable.

Inspection-Proof Your Sale: Get Ready Before Buyers Arrive

A home inspection can either confirm a buyer’s confidence or create doubt at a critical moment in the sale. Sellers who wait until the inspection to discover problems often face repair requests, renegotiation, delays, or even a cancelled deal. Preparing before buyers arrive allows sellers to reduce objections and present the home as well maintained. This report explains how to identify common issues, improve buyer confidence, and protect the strength of your sale.

1. Start With The Obvious Maintenance Items

Small maintenance issues can create a larger negative impression than sellers expect. Loose railings, dripping faucets, damaged caulking, burnt-out light bulbs, sticking doors, cracked switch plates, and missing hardware all suggest that the home has not been carefully maintained. These items are usually inexpensive to fix, but they can influence how buyers interpret the overall condition of the property.

2. Pay Attention To Water

Water issues are among the biggest concerns for buyers. Sellers should check under sinks, around toilets, near windows, in basements, around exterior grading, and near gutters and downspouts. Signs of water staining, active leaks, poor drainage, or musty odours can raise serious concerns. Addressing drainage and moisture issues early can prevent the inspection from becoming a negotiation problem.

3. Service Major Systems

Heating, cooling, plumbing, electrical, roofing, and water heating systems are major inspection focus areas. Sellers do not always need to replace older systems, but they should make sure systems are functioning properly and that service records are available where possible. A furnace tune-up, filter change, plumbing repair, or electrical correction can help reassure buyers that the home has been cared for.

4. Do Not Hide Problems

Trying to conceal defects can backfire. Inspectors are trained to identify signs of poor repairs, cover-ups, and deferred maintenance. Buyers may lose trust if they believe a seller is hiding something. It is better to address issues properly, disclose what is required, and provide documentation for repairs. Transparency can reduce suspicion and protect the seller during negotiation.

5. Consider A Pre-Listing Inspection

In some situations, a pre-listing inspection can be valuable. It gives sellers a clearer understanding of the property’s condition before going to market. Sellers can then decide which repairs to complete, which issues to disclose, and how to price the home accordingly. A pre-listing inspection can also reduce surprises and strengthen buyer confidence when used strategically.

6. Organize Receipts And Records

Documentation matters. Receipts for roof repairs, appliance service, furnace maintenance, window replacement, electrical work, plumbing repairs, or renovations can support the seller’s claims. Buyers feel more comfortable when they can see evidence of maintenance. A simple folder of records can make the home appear more credible and well managed.

7. Prepare The Home For Inspection Day

Access is important. Inspectors need to reach electrical panels, attic hatches, mechanical rooms, crawl spaces, water shutoffs, and appliances. Sellers should remove clutter, unlock areas, replace light bulbs, and make sure utilities are on. A clean and accessible home helps the inspection run smoothly and prevents unnecessary concerns from being raised.

8. Understand That Inspection Results Are Part Of Negotiation

Even a well-maintained home may have inspection findings. The goal is not perfection. The goal is to reduce major surprises and demonstrate responsible ownership. When sellers prepare in advance, they can respond to buyer concerns with facts, records, and confidence. This often leads to smoother negotiation and fewer last-minute complications.

Conclusion:
A strong sale depends on buyer confidence. Preparing your home before the inspection helps protect that confidence and reduces the risk of renegotiation. Sellers who handle maintenance early, disclose appropriately, and provide documentation are better positioned to keep the deal moving. Inspection-proofing is not about pretending the home is perfect. It is about showing that the home has been cared for and that the seller is prepared.

What Is Escrow and Why It Matters for Buyers and Sellers

Real estate transactions involve significant money, important documents, legal obligations, and several parties working toward the same closing date. Escrow is a process that helps protect both buyers and sellers by keeping funds or documents in the hands of a neutral third party until the required conditions are met. While the exact process varies by location, the purpose is the same: to create trust, accountability, and structure during the transaction. Understanding escrow helps buyers and sellers feel more secure from offer acceptance to closing.

1. Understand The Basic Purpose Of Escrow

Escrow exists to protect the parties in a transaction. Instead of money or documents being handed directly from one side to the other before the deal is complete, a neutral party holds them until the agreed conditions are satisfied. This reduces risk and ensures that funds, signatures, and required steps are handled in an organized way.

2. How Escrow Protects Buyers

For buyers, escrow can help ensure that funds are not released until the seller has met required obligations. These may include delivering clear title, completing agreed repairs, providing required documents, or satisfying closing conditions. The buyer gains confidence that their money is not simply transferred without the transaction being properly completed.

3. How Escrow Protects Sellers

For sellers, escrow can help confirm that the buyer is serious and that funds are available when required. Earnest money deposits or other funds held in escrow show commitment. Sellers gain confidence that the buyer has placed money into the process and that the transaction is moving forward under agreed terms.

4. Escrow And Deposits

In many real estate transactions, a buyer provides a deposit after the agreement is accepted. That deposit may be held by a brokerage, lawyer, title company, escrow company, or other authorized party depending on the jurisdiction. The deposit is usually credited toward the purchase price at closing if the transaction completes. If the transaction fails, the agreement determines how the deposit is handled.

5. Escrow And Conditions

Escrow is closely connected to transaction conditions. Financing, inspection, appraisal, title review, sale of another property, insurance approval, or document review may all need to be satisfied before closing. Escrow helps ensure that the transaction moves according to the agreement and that funds or documents are not released prematurely.

6. Why Deadlines Matter

Every real estate agreement includes timelines. Missing deadlines can create risk for buyers and sellers. Escrow instructions and closing procedures depend on documents, funds, signatures, and approvals arriving on time. Buyers and sellers should stay in close contact with their professionals so the transaction does not stall because of a missed requirement.

7. The Role Of Professionals

Real estate agents, lawyers, title companies, escrow officers, lenders, and other professionals may all play a role in keeping the transaction on track. Each party has responsibilities. A good team helps ensure that funds are delivered properly, documents are completed correctly, and closing steps are coordinated. Buyers and sellers should ask questions whenever they do not understand what is being held, who is holding it, and when it will be released.

8. Why Escrow Builds Confidence

Real estate transactions require trust, but trust works best with structure. Escrow creates that structure. It gives both sides a process for handling money and documents fairly. It also reduces the chance of misunderstandings by tying release of funds or documents to agreed conditions. This is why escrow, or a similar trust-handling process, is so important in real estate.

Conclusion:
Escrow helps make real estate transactions safer and more organized. It protects buyers by ensuring that funds are not released too early, and it protects sellers by confirming buyer commitment and transaction structure. Whether the process is handled by an escrow company, lawyer, title professional, brokerage, or another authorized party, the principle is the same. Funds and documents should be handled carefully, transparently, and according to the agreement.

JANUARY 2026: REAL ESTATE MARKET REPORT

We are only happy when we forecast something that actually comes to pass, AND it is positive. The majority of real estate analysts and industry pundits had no problem forecasting what was likely to be revealed about the Toronto and Region residential resale market in January, and sadly, they got it right. But no one is happy.

The Toronto and Region resale data (provided by the Toronto Regional Real Estate Board) speaks to the weakest start for any January in twenty years. Every category of record keeping produced negative results: sales, inventory, average sale prices, and the number of days homes remained on the market before they were reported sold. A deeper dive into the data indicates that some sectors of the Toronto and Region resale market are much more positive than others, which ultimately speaks to the pent-up demand that is being constrained by so many local and geo-political factors.

Only 3,082 homes traded hands in the greater Toronto Region. The slowest start in decades. On a per capita basis the number is even lower, given that twenty years ago the area’s population was approximately half its current size. A near 20 percent decline compared to January 2025, already one of the weakest January’s in recent record, is quite concerning. Hopefully these results are not a sign of further market deterioration but a reaction to very cold, snowy conditions locally, while consumers continue to adjust to a new chaotic, world order.

Interestingly even though the number of new listings that came to market declined by over 13 percent compared to last January, entering February inventory levels were up by over 8 percent. At the beginning of February almost 18,000 homes are available to buyers. The increase in inventory was directly related to January’s declining sales. Basically, sales fell faster than new listings; and as a result, inventory levels are higher even though fewer new listings came to market this January compared to last year.

Fewer listings coming to market is no doubt a reflection of sellers’ lack of market confidence. With prices declining and sale cycles approaching two months, it would appear only those sellers that are pressed to come to market are doing so. January’s average sale price may have also influenced those reluctant sellers.

In January the average sale price for all properties reported sold, including condominium apartments, came in at $973,289, 6.5 percent lower than last year, and the first time it has fallen below $1 million since before the Covid pandemic market. Taken alone, January’s average sale price is very misleading. In the City of Toronto, more than half of all reported sales – there were 1,067 in total – were condominium apartments. The average sale price generated by the 568 condominium apartments reported sold was only $631,932. The average sale price for all ground level properties sold in the City of Toronto came in at almost $1,200,000, including less expensive townhouses that sold at an average sale price of $876,585.

Average sale prices generated in the 905 Region were substantially less than City of Toronto. The average sale price for all properties sold was almost 30 percent lower in the 905 Region compared to Toronto, and that does not take into account the heavy weighting of condominium apartments in Toronto. The decline in the average sale price below $1 million, and particularly in the City of Toronto, is primarily condominium apartment sales driven.

It is no surprise that properties took longer to sell in January than they have in years. Days on market have been increasing regularly since the peak of the Toronto and Region resale market in the first quarter of 2022. The increase this January compared to last year was one of the largest, pushing days on market over 40, a number not seen since January 2009. In January 2010 days on market dropped to 28. The length of time properties spent on the market was not universal but varied by housing type and location. It is not surprising that condominium apartments languished, on average, for more than 50 days. Semi-detached properties in the 905 Region sold in 37 days and in only 34 days in the City of Toronto. In Toronto’s eastern trading areas all semi-detached properties sold (on average) in just 21 days, 53 percent faster than the overall days on market, and even more astonishingly, for 109 percent, yes 109 percent, of their asking price. Unfortunately, there were only 30 reported sales of semi-detached properties in all of Toronto’s eastern districts.

The most punishing aspects of the Toronto and Region resale market all came to play in January. Uncertainty has been a market factor since the Trump administration took office in early 2025. Affordability, although it has improved, remains a barrier to homebuying, even with the average sale price declining over 8 percent in January. Lastly, employment uncertainty is top of mind. Statistics Canada reported that in January 25,000 jobs had been lost.

There is no doubt that confidence will return at some point in 2026. If you are a buyer with capital, at this point in time you have time and leverage and therefore the best market opportunity in decades. As confidence returns, and buyers sense the change, they will begin to move before the market opportunity evaporates, as it will. Unfortunately, there are no concrete indicators as to when that will happen. That is the forecast the market is very impatiently waiting for.