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.
