Royal LePage expects prices to continue falling throughout 2026 after last year’s ‘recalibration’ on real estate.
By Manuela Vega | Business Reporter
Wed, Jan. 15, 2026
Royal LePage is holding firm on its forecast that Greater Toronto Area home prices will fall throughout 2026, continuing a trend of lower prices at the end of 2025 spurred by economic uncertainty amid tariff disputes and global tensions.
Prices in the fourth quarter of 2025 averaged $1.084 million, a 5.7 per cent annual drop, and they’re expected to decrease another 4.5 per cent annually in the fourth quarter of 2026, according to Royal LePage’s fourth-quarter 2025 update and market forecast published Thursday.
Now that interest rates have declined and more properties are being put up for sale, however, buyers will have “more choice, giving them opportunity with negotiation power,” and sales could increase as consumer confidence improves, said Royal LePage broker and leader of Team Zold, Shawn Zigelstein.
This year, Zigelstein is expecting more “balance,” noting that while home prices have declined, transactions have been “steady,” and could rise. He noted there has been an increase in pre-approvals as first-time buyers see an opportunity for ownership that didn’t exist three or four years ago.
”(Last year) was a little bit of a recalibration, I think, in people’s thought processes of how real estate works,” he said. “For so many years, it was bidding, bidding, bidding, and everyone was fighting to get to the marketplace, where I think now what we’ve started to see is a much more educated buyer.”
Additionally, in January, so far, Zigelstein said there has been an increase in various housing types being listed for sale, as properties that weren’t selling last year were taken off the market in November and December, and relisted this year.
According to the report, the median price of detached homes in the GTA declined 4.4 per cent annually to $1.364 million, while the median price of condos fell 8.2 per cent annually to $656,000.
“Buyers are not confident necessarily in buying condominium projects right now,” Zigelstein said, noting investors don’t foresee them generating positive cash flow.
Instead, purchasers are turning their attention toward freehold townhomes, he said. Oshawa has seen one of the steepest declines in home sales compared to October 2024, at a nearly 25 per cent drop.
New listings decreased 2.7 per cent, compared to October 2024. Detached house prices dropped 10.5 per cent to $800,278.
In the city of Toronto, the average home cost $1.034 million in the fourth quarter of 2025, representing a six per cent annual decrease.
Zigelstein said the overall home price in the city, like the GTA, is likely to continue falling in 2026 — potentially dragged by fewer sales of studios and one-bedroom apartments, while more family-sized condos and townhomes are expected to sell.
According to the report, the median condo price in the city dropped 6.5 per cent to $637,000, thanks to higher inventory levels and inactivity among investors. It added pre-construction activity was stagnant, with developers cautious of soft market conditions and launching fewer new projects.
Detached homes in the city had an even bigger price drop of 9.8 per cent year-over-year to a median of $1.464 million, something Zigelstein attributed to fewer sales of smaller and lower-priced homes while higher-priced homes did sell.
”(Buyers) are worried about their deposits. Where is it going to come from? Is their job going to be steady? Are they set for their finances? Are they going to have money coming from parents? They may be waiting on a number of different things,” he said. Purchasers with higher budgets — $3 million to $5 million homes — are not “interest rate sensitive” and “probably have extremely good jobs in place,” Zigelstein said.