N※N

Toronto Housing Sales Plunge for Third Straight Month

  //house-home.news-articles.net/content/2026/01/0 .. using-sales-plunge-for-third-straight-month.html
  Published in House and Home on Wednesday, January 7th 2026 at 9:47 GMT by reuters.com

Toronto Housing Market Continues to Cool: Sales Plunge for Third Month Amid Economic Uncertainty

Toronto's housing market is experiencing a sustained slowdown, with home sales falling for the third consecutive month in December, according to data released by the Toronto Regional Real Estate Board (TRREB) on January 7th, 2024. The decline, coupled with a rise in inventory, signals a shift in the market dynamic after a period of intense competition and soaring prices. The report points to growing economic uncertainty and persistent high mortgage rates as key factors dampening demand.

TRREB reported 3,954 sales in December 2023, a dramatic 36.3% decrease compared to the 6,680 sales recorded in December 2022. This marks the steepest year-over-year decline in sales since the initial shock of the COVID-19 pandemic. While seasonal dips are common in the winter months, the magnitude of this drop indicates a deeper cooling trend. Total sales for the entire year were also down, reaching 66,224 – a 19.1% decrease from the 81,935 sales in 2022.

The decrease in sales isn’t solely due to decreased demand. The number of new listings also increased, albeit at a slower pace. There were 9,024 new listings in December, up 14.3% from the same month last year. This increase in supply is contributing to the easing of competition, giving buyers more options and reducing pressure on prices. The month ended with 12,836 active listings, significantly higher than the 9,024 active listings at the end of December 2022. This represents a substantial increase in inventory, moving the market closer to balanced conditions.

Price Adjustments Reflect Cooling Demand

Unsurprisingly, the slowdown in sales and the increase in listings are impacting prices. The average selling price in December was $1,089,536, a 2.5% decrease year-over-year. While not a substantial drop, it signals a break from the rapid price appreciation seen throughout much of the pandemic. TRREB highlights that the average price masks significant variation within the market. Some segments, particularly more affordable property types, are experiencing larger price declines.

However, it’s important to note that prices remain substantially higher than pre-pandemic levels. The board emphasizes that the long-term fundamentals supporting the Greater Toronto Area (GTA) housing market – population growth, employment levels, and a limited supply of housing – remain strong.

Mortgage Rates and Economic Uncertainty the Primary Drivers

The primary culprit behind the cooling market is the surge in mortgage rates throughout 2023, driven by the Bank of Canada’s aggressive efforts to combat inflation. The Bank of Canada raised its overnight rate eight times in 2022 and twice in 2023, bringing it to 5% – a level not seen in over two decades. While the Bank has paused rate hikes in recent months, and signaled a potential pivot in 2024 (according to reports from December, linked within the Reuters article), the impact of previous hikes continues to be felt. Higher mortgage rates significantly increase the cost of homeownership, pricing many potential buyers out of the market.

Furthermore, broader economic uncertainty, including concerns about a potential recession and persistent inflation in other areas of the economy, is also contributing to buyer caution. Many potential homebuyers are delaying purchases, hoping for greater clarity on the economic outlook and a potential easing of interest rates.

Looking Ahead: A Measured Outlook

TRREB anticipates that the GTA housing market will remain subdued in the near term. The board’s president, Jennifer Howard, stated in the report that “Higher mortgage rates will continue to impact affordability in the coming months.” However, she also noted that a moderation in inflation and potential rate cuts by the Bank of Canada later in 2024 could provide some relief and stimulate demand.

Analysts predict a more balanced market in 2024, with prices expected to remain relatively flat or experience modest declines. The level of inventory will be a key factor to watch. If inventory continues to build, it will put further downward pressure on prices. Conversely, a lack of new listings could stabilize prices.

The Reuters article also notes that the rental market in Toronto remains extremely tight, with vacancy rates near zero and rents continuing to rise. This situation could eventually push some renters back into the homebuying market, providing some support to sales.

In conclusion, the Toronto housing market is undergoing a noticeable correction, driven by a combination of higher mortgage rates, economic uncertainty, and increased inventory. While the long-term fundamentals remain positive, the market is expected to remain challenging in the short term. The future direction of interest rates and the overall economic climate will be crucial in determining the pace and extent of the market's recovery.