Market Insight for March 13

A stormy winter in Toronto cooled real estate activity in January, but a further drop in February suggests that unpredictable weather alone isn’t responsible for the slowdown.

Many people in the industry initially blamed the cold temperatures and snow for the slow start to the year in real estate activity. One senior economist at a major Canadian bank points out that sales dropped 4.9 per cent in February compared with January on a seasonally adjusted basis.

While some observers felt the harsh winter conditions were largely responsible for the sluggish start, sales likely would have bounced back in February if weather had been the only factor keeping buyers on the sidelines.

The lack of momentum in the Toronto market is starting to raise concerns, since it’s occurring despite a more favourable interest-rate environment that has been in place since last summer.

Sellers also appear to be losing some confidence. New listings fell 17.7% per cent in February compared to the same time last year, representing the fifth decline in the past five months.

Ongoing tensions in trade relations with the United States are believed to be weighing on the market, along with the persistent issue of affordability.

More recently, the conflict in the Middle East has also been added to the list of risks that could affect a potential recovery in Canada’s housing market in the second half of this year.

So far in March, the market continues to behave unpredictably, with little consistency in activity.

The market typically starts to pick up in March, but some sellers are waiting until after the March break for both private and public schools before bringing their properties to market.

The expanding conflict has also rattled financial markets over the past two weeks.

Home buyers who have investments in the stock market, for example, may notice a drop in their portfolios and decide to pause plans to move up in the housing market.

There are also concerns about the overall health of the economy and the impact of upcoming mortgage renewals for homeowners carrying significant debt.

Against this backdrop, the GTA market remains clearly in buyer’s territory, which is encouraging determined house hunters to look for motivated sellers who may be willing to consider a lowball offer.
Most sellers will test the market for a period of time and may then reduce their asking price by three to five per cent to try to attract a new group of buyers before accepting a lowball bid.

The market is highly segmented, with some properties selling quickly while others sit on the market, depending on price and location.

The Toronto condo market is in a deep correction, characterized as a “buyer’s market” with elevated inventory and falling prices. As of early 2026, average prices have dropped roughly 5-11% year-over-year, with some units selling under $400,000. Higher interest rates, limited investor activity and oversupply have caused sales to fall to multi-year lows.

The market appears to be in the process of finding its footing, with analysts noting that the strong price growth seen over the past six years has largely been balanced out. While current conditions may be more demanding for sellers, they are also creating new opportunities for buyers and investors focused on long-term value.