As forecast, September’s residential resale market performance was, at best, lacklustre. It was the third consecutive month of declines in sales and average sale price, a clear manifestation of a structural change taking place in the Toronto and Region marketplace. Although the overall performance was weaker than in September 2025, the results were not homogeneous.
At the macro level, there were negative variances in every statistical category, including days on market, which produced a marginal variance from 33 to 34 days, the length of time properties took to sell during the month of September.
Typically, reported sales show an improvement in September compared to August’s results. September has traditionally been regarded by buyers, sellers and the real estate community as the beginning of the fall market, a robust buying and selling period in the annual real estate cycle. That did not happen this year. August saw 5,042 reported sales for the Toronto and Region resale market. September only produced 5,040 sales, a marginal decline compared to August, but clearly contrary to historical patterns. The average sale price improved in September compared to August, from $993,604 to $1,006,409. Interestingly, the reported average sale price has remained “sticky” throughout 2026. Year-to-date average sale prices have declined by 3.9 percent compared to the annual average sale price for 2025, notwithstanding underperforming sales.
The decline in properties coming to market is also inconsistent with historical patterns. September, being the beginning of the fall market, normally sees sellers bring their properties to market, increasing inventory levels and choice for buyers. That did not happen in September. Only 16,500 properties came to market in September, 14.4 percent fewer than the 19,270 properties that came to market in the same month last year. Many of these “new” listings are properties that have already been on the market but did not sell during their first appearance, primarily because of the price expectations of the sellers. September’s declining new listing numbers are a noticeable indication that sellers are deciding to wait for what they believe will be improved market conditions. At the end of September, there were 26,131 properties on the market available to buyers, almost 10 percent fewer than last year.
The story in September’s data is the big divide between the performance of the City of Toronto and the 905 Region. In the aggregate, sales in the 905 Region declined by 12.2 percent compared to sales achieved in September 2025. By contrast, sales only declined by 5.8 percent in the City of Toronto. Given that 905 Region sales represent 62 percent of all sales for the Toronto and Region resale market, overall numbers are disproportionately driven by the market’s performance in the 905 Region. All property type sales in the 905 Region – detached, semi-detached, townhouses and condominium apartments –performed equally poorly.
The delta between average sale prices achieved in the 905 Region and the City of Toronto was not as pronounced as sales. Average sale prices in the 905 Region declined by 6.75 percent in September compared to last year, with condominium apartment sales declining by an eye-popping 12 percent. Condominium apartment average sale prices in the 905 Region are now down to $533,654. Average sale prices in the City of Toronto only declined by a little over 4 percent. Condominium apartment average sale prices declined by a little more than 6 percent. The average sale price for condominium apartments in the City of Toronto came in at $640,248, 7 percent lower than $683,259 in the City’s central core. The city’s central core accounts for almost 70 percent of all condominium apartment sales in the City of Toronto.
The Toronto and Region resale market is clearly A Tale of Two Cities.
As the market enters the last quarter of 2026, it is becoming obvious that the year-end results will not be an improvement over 2025’s market performance. In 2025, 62,311 properties traded hands. Even if sales for the last quarter matched last quarter sales achieved in 2025, 2026 year-end results would come in at around 61,500. Given the resale market’s prevailing mood, 60,000 sales at year-end is a more realistic number.
There are many factors contributing to the resale market’s morbidity. The tariff war that Canada is engaged in with the United States is beginning to negatively impact Canada’s economy, and in particular the economy of southern Ontario. The U.S.-Iran war and its impact on gas and diesel prices is contributing to higher inflation, which in turn impacts affordability, particularly the purchase of real estate. Government debt, both in Canada and the U.S., is causing bond prices to spike, which in turn has resulted in substantially higher borrowing costs. At the end of September, five-year fixed mortgage rates were coming in at 4.74 percent. Hyperscale borrowing is also putting pressure on bond prices and, in turn, on borrowing costs.
Combined, all these factors have created an unsettled real estate landscape, negatively influencing its current lacklustre performance. Uncertainty and affordability have become the market’s key concerns.
