Toronto’s housing market is slipping, but listings are shrinking too — the contradiction buyers can’t ignore
Toronto is facing a housing-market paradox: prices and sales are sliding, yet fewer properties are coming to market, leaving both buyers and sellers sidelined and unsure where the floor really is.
Why are Greater Toronto sales and prices falling at the same time?
In February, the Toronto Regional Real Estate Board said 3, 868 homes changed hands in the Greater Toronto Area, down 6. 3 per cent from the same month a year earlier. Sales also slipped one per cent on a seasonally adjusted basis from January. The board also recorded a decline in pricing: the average selling price fell 7. 1 per cent year-over-year to $1, 008, 968, while the composite benchmark price was down 7. 9 per cent from a year earlier.
The board’s view is that potential buyers are waiting for the market to bottom out before committing. That expectation matters because it can slow activity further: if buyers believe prices will keep falling, they can delay decisions, keeping transactions weak even when price cuts appear.
What does it mean when Toronto listings drop while “days on market” rise?
While demand looks hesitant, supply signals are not straightforward. The board counted 10, 705 new listings in February, down 17. 7 per cent from last year. Inventory also edged lower: total active listings fell 2. 4 per cent to 19, 414.
Separately, broker Christopher Bibby of Re/Max Hallmark Bibby Group Realty described a market where new and active listings dipped in the opening weeks of 2026 compared with the same time last year, while “days on market” lengthened. He suggested one reason inventory may be shrinking is that some would-be sellers are not refreshing listings or launching new ones during the current malaise.
That combination—fewer new listings, longer selling times—points to a market where sellers may be reluctant to accept today’s pricing, while buyers remain cautious about stepping in before they believe values have stabilized.
Who is under pressure, and what could change next for Toronto?
The strain appears particularly acute in the condo segment. Bibby said that as the Toronto-area condo segment approaches four years of declining sales, “buyers and sellers have absorbed enough data to understand today’s going rate. ” He said some condo units are changing hands at prices last seen in 2017, 2018, and 2019. He also described conditions as especially tough for distressed investors trying to exit micro units in downtown towers he characterized as flooded with supply.
At the same time, Bibby said showings have picked up in central Toronto and described a burst of February sales as “peculiar, ” adding that engagement may be returning because “maybe we’re finally hitting a price level that’s getting some engagement. ”
Daren King, senior economist with National Bank of Canada, said he sees little urgency among buyers across all segments of the Toronto area market as sluggish sales carry from one month into the next. He also pointed to weak activity, saying transactions per household are hovering at historically low levels and that the market’s weak activity is more in keeping with the 2008 financial crisis and the start of the Bank of Canada’s tightening cycle in 2023. King expects the decline in prices to continue for the first half of the year, with potential for a moderate recovery in the second half, depending on the health of the Ontario labour market, the success of the renegotiation of the Canada-U. S. -Mexico Agreement, and the actions of U. S. President Donald Trump.
From the board’s side, TRREB president Daniel Steinfeld said that if new listings continue to trend lower through the spring, competition between homebuyers will increase, which could lead to higher home prices and an upswing in sales. For now, the market signals remain mixed: falling prices and sales suggest caution is dominant, while shrinking new listings raise the possibility that any future demand return could run into tighter supply.
