N※N

GTA Housing Prices Dip Below $1 Million

  //house-home.news-articles.net/content/2026/02/04/gta-housing-prices-dip-below-1-million.html
  Published in House and Home on Wednesday, February 4th 2026 at 19:41 GMT by The Globe and Mail
      Locales: Ontario, CANADA

Toronto, ON - February 5th, 2026 - The Greater Toronto Area (GTA) housing market continues its ongoing correction, with the average home price recently dipping below the symbolic $1 million mark. Data released this week by the Toronto Regional Real Estate Board (TREB) indicates an average price of $998,340 for all home types as of the week of December 20th, 2025 - a level not seen since before the surge in prices fueled by the COVID-19 pandemic.

This decline represents a significant shift from the frenzied market activity experienced throughout 2020 and 2021. While a welcome development for prospective homebuyers, experts caution that the GTA remains a significantly expensive market compared to pre-pandemic norms. In December 2019, the average home price hovered around $882,000, highlighting that while prices have cooled, they are still substantially elevated.

The primary driver of this cooling trend is the aggressive series of interest rate hikes implemented by the Bank of Canada over the past several years. These increases have drastically increased the cost of borrowing, making it more difficult for potential buyers to qualify for mortgages and subsequently shrinking the pool of eligible purchasers. "We're seeing a very direct cooling effect from interest rates," explains Robert Lavender, TREB's Director of Market Analysis. "Higher rates reduce purchasing power and force many would-be buyers to postpone their plans."

The impact of these higher rates isn't uniform across all segments of the market. While the overall average is down, the luxury market - homes priced above $1 million - is demonstrating greater resilience. The average price for these properties stood at $1.66 million in the week of December 20th, a decline from the $1.9 million recorded in the same week of 2021, but a comparatively smaller drop than that experienced in more affordable segments. This suggests that wealthier buyers are less sensitive to interest rate fluctuations and continue to drive demand at the higher end of the spectrum. Experts believe this disparity will likely persist, creating a two-tiered market.

TREB's recent data also revealed a significant decrease in sales volume. Last week saw 5,961 sales, a substantial 44.7% decrease compared to the same week in 2021. This decrease in transaction numbers further underscores the impact of affordability challenges and suggests a more cautious approach from both buyers and sellers.

Looking Ahead: What's Next for the GTA Housing Market?

Several factors will continue to shape the GTA housing market in 2026 and beyond. Firstly, the trajectory of interest rates remains crucial. While many economists predict the Bank of Canada will begin to lower rates later this year, the timing and extent of these cuts are still uncertain. Any further increases would likely exacerbate the current slowdown, while rate reductions could provide a modest boost to demand.

Secondly, population growth continues to be a major force. The GTA remains a magnet for immigrants and interprovincial migrants, creating ongoing demand for housing. However, the pace of new construction hasn't kept up with this growth, contributing to the long-term housing supply shortage.

Thirdly, government policies regarding housing affordability will play a critical role. Recent initiatives focused on increasing density and streamlining the development approval process are aimed at boosting supply, but their impact will take time to materialize. Further intervention, such as tax incentives for first-time homebuyers or measures to curb speculative investment, could also influence market dynamics.

Finally, the overall economic outlook is paramount. A strong economy with robust job growth will support housing demand, while a recession could lead to further price declines. The current economic forecasts suggest a period of moderate growth, but risks remain.

While the dip below $1 million provides a momentary respite, the GTA housing market remains challenging for many. Affordability remains a significant hurdle, and a sustained recovery will require a multifaceted approach that addresses both supply and demand factors. For prospective buyers, patience and careful financial planning are key. For sellers, realistic pricing expectations are essential in a market that is no longer characterized by rapid price appreciation.