August transactions fell as US tariff fears and tighter listings sidelined GTA buyers
Greater Toronto Area home sales slipped in August for the first time in six months, as the collapse of US-Canada trade talks rattled buyer confidence across Canada's largest real estate market.
The Toronto Regional Real Estate Board (TRREB) reported 5,057 transactions through its MLS System in August. That's a 2.1% decline year-over-year and a 1.3% drop from July on a seasonally adjusted basis, ending a rebound that had held since March.
The average selling price fell 2.7% annually to $993,410, dipping below the $1-million threshold for only the second time in 2026.
The MLS Home Price Index (HPI) Composite benchmark declined 4.5% year-over-year to approximately $931,200 on a seasonally adjusted basis.
The data landed one day after the Bank of Canada held its policy rate at 2.25% for a seventh straight meeting, with Governor Tiff Macklem signalling policymakers are prepared to raise borrowing costs multiple times if inflation proves persistent.
Inventory drop tightens an already constrained market
New listings entered into the MLS System totalled 12,075 in August, a steep 14.1% decline from a year earlier. That contraction in available homes may be doing as much to limit sales volumes as any softening in demand.
With condo prices continuing to fall across the GTA — down 7.1% year-over-year — many prospective sellers appear reluctant to list at current valuations.
The steepest annual declines occurred in York Region, where the benchmark fell 6.2%, while the city of Toronto recorded a 3.7% drop and Halton declined 3%. Detached houses across the region fell 4.5%.
On a month-over-month seasonally adjusted basis, the HPI Composite was essentially flat versus July, and the average selling price edged higher, a tentative signal that the pace of price decline may be moderating.
TRREB President Daniel Steinfeld said market conditions could shift quickly.
"If inventory tightens and home prices begin to rise, some buyers may face a trade-off between waiting for greater economic certainty and purchasing before prices move higher," he said.
"At the same time, improving market conditions for sellers could bring more listings to market, providing buyers with additional choice."
BILD reported strong GTA single-family home sales in July, with Micky Khaneka of MKG Mortgages saying the expanded HST rebate has sparked renewed interest in new-build properties.https://t.co/xmDPb7g11M
— Canadian Mortgage Professional Magazine (@CMPmagazine) September 2, 2026
Trade war and borrowing cost fears sideline buyers
August's slowdown coincided with a breakdown in US-Canada trade negotiations. Washington imposed new 50% tariffs on approximately $20 billion in Canadian imports after talks collapsed, sending fresh uncertainty through the housing market and the broader economy.
The five-year fixed mortgage rate held at 4.8% through August, according to rate comparison website Ratehub.ca.
"If the trade war persists, weakening economic sentiment could weigh on sales activity even if mortgage rates remain relatively stable," said Jamie David, vice-president of marketing and mortgages at Ratehub.ca.
US tariff escalation has clouded the Bank of Canada's rate outlook since mid-year, with most economists expecting the central bank to maintain its hold through December.
TRREB Chief Information Officer Jason Mercer said trade anxiety, rather than affordability, is now the primary drag.
"The main hold-back for many households has been concerns around trade with the United States and the potential for higher inflation and borrowing costs in the future," he said.
TRREB CEO John DiMichele acknowledged that while the data points to a more balanced market, Ontario's structural supply gap remains unresolved.
"A more balanced resale market is a positive development, but it does not address Ontario's ongoing housing supply and affordability challenges," he said, urging governments at all levels to remove restrictive zoning policies, reduce development charges, and accelerate approvals.
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