What Buyers, Sellers & Investors Need to Know Right Now

The Greater Toronto Area real estate market continues to evolve in early 2026, with February data confirming a shift toward more balanced conditions. Between rising inventory, cautious buyer behaviour, and new government incentives, there are important opportunities emerging for those who understand the data.

In this update, we break down:

• February 2026 market trends (month-over-month and year-over-year)
• The current GTA rental market
• CMHC’s latest housing outlook
• The new GST rebate for first-time buyers

February 2026 Market Stats (TRREB Data)

📉 Year-over-Year: February 2026 vs February 2025

According to the Toronto Regional Real Estate Board (TRREB):

• 3,868 home sales were recorded in February 2026
• This represents a 6.3% decrease year-over-year
• The average selling price was approximately $1,008,968, down about 7.1% year-over-year
• The MLS® Home Price Index benchmark declined by ~7.9% year-over-year

Interpretation:

This confirms that prices have softened compared to 2025, but this is not a collapse. Instead, it reflects:

• Affordability constraints
• Higher borrowing costs compared to pandemic-era lows
• Buyer hesitation amid economic uncertainty

📈 Month-over-Month: February vs January 2026

• Sales activity rebounded from January’s slower start (impacted by winter conditions)
• However, prices continued to trend slightly downward month-over-month
• Inventory dynamics remain mixed: 1. New listings declined year-over-year by 17.7% 2. Sellers are holding back, waiting for stronger conditions

Interpretation:

• Buyers currently have negotiation power
• The average sale price to list price ratio has dropped below 100% in many areas
• However, low listing supply could tighten the market quickly if demand returns

National Market Context (CREA)

The Canadian Real Estate Association (CREA) provides important national context:

• Home sales declined 5.8% month-over-month in January 2026
• Sales were 16.2% below January 2025 levels
• The national Home Price Index was down 4.9% year-over-year
• Inventory levels are approaching balanced market conditions (~4.9 months of inventory

Interpretation:

Canada is experiencing a broad market normalization, not a downturn isolated to the GTA.

🏢 GTA Rental Market Update (TRREB Insights)

The rental market remains a critical piece of the housing ecosystem.

Key Trends:

• Rental listings have increased year-over-year, improving tenant choice
• Rental transactions have also increased, indicating continued demand
• Condo-heavy rental supply continues to expand

What This Means:

For Renters:

• More inventory = greater selection and negotiating ability
• Rent growth is stabilizing after rapid increases in previous years

For Investors:

• Rental demand remains strong, but
• Cash flow is tighter due to higher financing costs

For Buyers:

• The rent vs. buy gap is narrowing again, especially in suburban markets

🏗️ CMHC 2026 Housing Outlook

The latest report from the Canada Mortgage and Housing Corporation (CMHC) provides critical forward-looking insights.

Key Forecasts:

• Housing starts in Ontario are projected to fall to near 2-decade lows in 2026
• New construction is slowing due to: 1. High building costs 2. Weak pre-construction condo demand 3. Toronto condo pre-construction sales hit multi-decade lows

Demand & Prices:

• Home sales are expected to increase modestly in 2026 due to pent-up demand
• However, Ontario home prices may continue to soften in 2026 before recovering in 2027

Rental Market Outlook:

• Purpose-built rental construction remains strong
• Rental markets are expected to gradually become more balanced
• Rent growth will moderate but remain supported by new, higher-priced units

Interpretation:

We are entering a transition phase:

• Short-term softness
• Medium-term supply constraints
• Long-term upward pressure on prices

New GST Rebate (Up to $50,000 for First-Time Buyers)

One of the most significant recent policy updates is the new GST rebate aimed at first-time home buyers.

✅ What It Includes:

Eligible buyers may receive up to $50,000 in GST rebates when:

• Purchasing a new construction home
• Building a home
• Completing a substantial renovation

Purpose of the Policy:

• Improve affordability for first-time buyers
• Stimulate housing construction
• Increase overall housing supply

⚠️ Key Considerations:

• Applies only to new housing, not resale properties
• Eligibility criteria include:
  • First-time buyer status
  • Price thresholds
  • Primary residence requirements

Strategy Insight:

This incentive creates a strong opportunity window for:

• Buyers considering pre-construction
• Families planning custom builds
• Investors exploring value-add renovation projects

What This Means for You

🟢 Buyers:

• More inventory and softer prices = better entry opportunities
• GST rebate may significantly reduce upfront costs on new builds

🔵 Sellers:

• Strategic pricing and marketing are essential
• The market is still active, but no longer forgiving of overpricing

🟡 Investors:

• Rental demand remains stable
• Long-term fundamentals are still strong despite short-term compression

Final Thoughts

The GTA housing market in 2026 is not defined by decline, but by rebalancing and opportunity.

• Prices are adjusting
• Inventory is evolving
• Policy is shifting in favour of buyers
• Demand is building beneath the surface

With over 100,000 buyers estimated to be waiting on the sidelines, the next phase of the market could shift quickly once confidence returns.

~ Natacha Jamshidi

Check out February’s Market Update HERE!