Brokers face a cautious fall market as Greater Toronto Area buyers sit on pent-up demand
Greater Toronto Area (GTA) home sales lost more ground in September, as would-be buyers waited for clearer signals on jobs, inflation and borrowing costs before committing, according to the Toronto Regional Real Estate Board (TRREB).
TRREB recorded 5,040 transactions through its Multiple Listing Service (MLS) system, a 9% drop from 5,540 in September 2025.
It was the third straight month of annual declines and the steepest since January, based on TRREB's revised monthly figures. The drop reverses the spring rebound, when GTA home sales climbed 9.4% year over year in June.
Sellers pulled back too. New listings fell 14.4% to 16,500 and active listings dropped 9.3% to 26,131.
On a seasonally adjusted basis, both sales and new listings declined from August.
Prices kept sliding. The average selling price fell 5.1% to $1,006,409, while the MLS Home Price Index composite benchmark, TRREB's measure of a typical home's value, dropped 4.7% to $917,600. Both edged lower month over month.
Where the slowdown hit hardest
The suburbs took the bigger hit. Detached sales in the regions surrounding the City of Toronto, known as the 905, fell 10.3%, compared with a 4% decline inside the city.
Townhouse sales across the GTA slid 12.8%, the largest drop of any major home type.
Condo apartments posted the steepest price decline, with the average falling 7.7% to $605,257.
Homes also sat slightly longer, averaging 34 days on the market compared with 33 a year earlier.
Why pent-up demand isn't turning into mortgage deals
TRREB says demand has not gone anywhere.
"We know there is substantial pent-up demand in the GTA, with many households fully intending on purchasing a home in the months ahead. These would-be homebuyers want to take advantage of today's more affordable housing market, but they need to be confident that their employment situation will remain solid and inflation will not put pressure on borrowing costs over the long term," said Jason Mercer, TRREB's chief information officer.
That confidence remains hard to find. The Bank of Canada held its overnight rate at 2.25% on September 2, but warned that upside risks to inflation had increased, lending weight to global banks' forecasts of rate increases before year-end.
Abigail Watt of UBS Global Research now expects the Bank of Canada to raise rates in October and again in January, arguing that policymakers are becoming less willing to tolerate above-target inflation as price pressures continue to build. https://t.co/LneUFlMN2r
— Canadian Mortgage Professional Magazine (@CMPmagazine) October 5, 2026
Toronto's unemployment rate stood at 6.8% in August and annual inflation ran at 3%, according to Statistics Canada figures cited by TRREB.
Stable rates may not be enough on their own.
"If the trade war persists, weakening economic sentiment could weigh on sales activity even if mortgage rates remain relatively stable," Jamie David, vice-president of marketing and mortgages at Ratehub.ca, previously said.
Local politics is another variable. TRREB president Daniel Steinfeld pointed to the upcoming municipal elections across the GTA and Simcoe County.
"The decisions our next mayors and councillors make on affordability, housing supply and the costs associated with buying a home can also influence buyer demand and confidence in the market," he said.
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
