2025 Housing Market Wrap Up and What to Watch in 2026

As we close out 2025, Ontario’s housing market has continued its gradual adjustment. Higher inventory, more cautious buyers, and stable borrowing costs have reshaped market conditions, creating a quieter but more balanced environment heading into 2026.

Below is a snapshot of what defined the past year and what buyers, sellers, and investors should be watching as we move forward.

Market snapshot

Ontario real estate continued to cool through 2025 as rising supply reshaped market conditions. Total home sales declined 5.7% year over year, remaining below both five year averages and longer term norms. The MLS benchmark price fell 6.3% annually, reinforcing that this cycle has been driven more by adjustment than widespread distress.

Affordability has shown signs of improvement. Softer home prices combined with more stable borrowing costs have reduced the income required to qualify for a mortgage in many major markets, giving buyers more purchasing power compared to recent years.

Across the GTA and surrounding regions, sales activity remains slower and inventory elevated, with months of inventory hovering around 4.6 months, well above historical norms. Buyers have more choice and negotiating leverage, while sellers are adjusting expectations in a quieter, more balanced market.

The Bank of Canada has described the housing market as slow, not stalled. While cautious decision making continues to temper demand, stable interest rates may help support gradual activity as we move toward the spring market.

Key takeaway: This buyer’s market is being shaped by realism and patience, not panic selling or widespread financial stress.

Mortgage and rate outlook

The Bank of Canada held its policy rate in December 2025, signaling that while inflation has eased, rates are likely to remain stable in the near term. After years of volatility, this stability has helped restore predictability to borrowing decisions.

What this means:

For buyers and renewals, stable rates make budgeting easier and reduce the risk of sudden payment increases. Those renewing in 2025 or 2026 should avoid automatically accepting their first renewal offer, as shopping around can often result in improved terms.

For sellers, predictable borrowing costs may encourage more buyers back into the market, but pricing, preparation, and presentation remain critical with elevated inventory.

Notable housing headlines

Rental market cooling heading into 2026: Click here for full article.
Rent growth is slowing across many Canadian cities as new rental supply comes online. Renters are gaining more choice and negotiating power after several years of tight conditions.

First time buyers among the oldest globally: Click here for full article.

Affordability pressures have pushed the average first time buyer age close to 40 in the GTA. While easing prices are beginning to improve access, affordability remains a challenge for many households.

Policy watch: Ontario Bill 60 and the LTB

Ontario’s Bill 60 introduces several changes aimed at improving efficiency and clarity at the Landlord and Tenant Board: Click here to view the bill.

Key updates include:
• Elimination of the one month compensation requirement when homeowners move into their own rental unit
• Shortening the rent arrears window from 14 days to 7 days
• Reduction of the review window from 30 days to 15 days
• Publication of LTB decisions to help improve transparency and tenant screening

These changes are expected to impact how landlords and tenants navigate disputes moving forward.

Seasonal homeowner tips

As winter sets in, preventative maintenance becomes especially important.

• Check plumbing for slow leaks, test sump pumps, and ensure outdoor faucets are fully shut off
• For vacant properties, including rentals or homes on the market, ensure heat is on and monitored
• Keep snow clear from foundation walls, window wells, and furnace or dryer vents to prevent moisture issues and airflow problems

Important dates to note

• January 28, Bank of Canada interest rate announcement
• March 1, RRSP contribution deadline

Community thank you

We’re incredibly grateful to everyone who joined us for our second annual Pumpkin Pick Up and Coat Drive with family, friends, and clients.

Together, we gave away over 50 pumpkins and collected 44 coats, 27 pairs of gloves, and multiple bags filled with sweaters, scarves, socks, and more to help local families stay warm this winter. Thank you for being part of something meaningful in our community.