Rate hike and trade fears pushed GTA buyers to the sidelines
Greater Toronto Area home sales fell 7.9% in October as buyers contended with the Bank of Canada’s first interest rate increase in three years, piling fresh anxiety atop existing concerns over Canada-US trade negotiations and persistent inflation.
Data from the Toronto Regional Real Estate Board (TRREB) in Ontario showed 5,603 homes sold across the GTA last month, a 7.9% year-over-year decline.
New listings fell 11.9% year-over-year to 14,173, while total active inventory across the region stood at 25,098 properties.
The average selling price declined 2.7% to $1,024,108, with TRREB’s Multiple Listing Service (MLS) Home Price Index Composite benchmark down 4.3% over the same period.
On a seasonally adjusted basis, both sales and new listings edged higher month-over-month compared with September.
Borrowing costs cloud an already hesitant market
The Bank of Canada raised its overnight lending rate by 25 basis points to 2.50% on October 28, its first increase since July 2023, and its first move in a year.
The decision reversed a prolonged pause even as GTA home sales had climbed 9.4% year over year in June before momentum faded through the summer and autumn.
Jason Mercer, chief information officer at TRREB in Ontario, said declining prices have provided a partial offset.
“GTA homebuyers continued to benefit from substantial negotiating power on price over the past year,” he said.
“While borrowing costs have increased on the back of higher inflation, the impact on monthly mortgage payments has been mitigated by lower selling prices, helping keep affordability in check.”
Aled ab Iorwerth of CMHC says greater certainty on trade could improve confidence among homebuyers and developers, supporting housing activity and construction at a time when higher rates and economic uncertainty continue to weigh on the market. https://t.co/3d7Cu3TCov
— Canadian Mortgage Professional Magazine (@CMPmagazine) November 3, 2026
The broker view on the ground
For mortgage brokers working in the GTA, October’s figures reinforced a prolonged period of constrained client activity.
The challenges facing first-time homebuyers in Canada’s 2026 housing market have been particularly acute in Toronto, where lower prices have brought new complications of their own.
Toronto-based mortgage broker Micky Khaneka, who has spoken with Canadian Mortgage Professional about Toronto’s condo market remaining in limbo despite falling prices, described the bind clients face.
“People are starting to pick up resales or newbuilds that are being built for closing at a much, much lower price than what they were initially sold for,” he said.
“But the clients who bought at those prices are still in a little bit of limbo because unless there are blanket appraisals from the banks, it’s very challenging for them to get appraisals on them.”
TRREB President Daniel Steinfeld, also based in Toronto, pointed to international events as the most plausible route to renewed buyer confidence.
“If a Canada-U.S. trade deal is reached, GTA residents could gain a clearer picture of the economic outlook,” he said.
“Combined with a resolution to the conflict in the Middle East, this could help ease concerns about inflation and economic uncertainty, strengthen consumer confidence and renew interest in homeownership as we move into 2027.”
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