Home sales in the GTA dropped 9 per cent in September from the same month last year.Fred Lum/The Globe and Mail
Angst is permeating the Toronto-area real estate market this fall as buyers and sellers hit pause in September.
Sellers are reluctant to list if they won’t fetch the price they are hoping for, says Pritesh Parekh, real estate agent with Century 21 Legacy. Buyers are hesitant to sign a deal if prices have farther to fall.
Mr. Parekh says escalating trade tensions with the United States, renewed conflict in the Middle East and the U.S. Federal Reserve’s interest rate hike are some of the factors unsettling consumers again.
“The conversation has changed from affordability to urgency,” Mr. Parekh says. “Is this urgent or not?”
Toronto home sales fall for second straight month
Sales in the Greater Toronto Area dropped 9 per cent in September from the same month last year, while new listings fell 14.4 per cent in the same period.
The average price declined 5.1 per cent last month from September, 2025, to stand at $1,006,409.
Sales last month decreased 5.2 per cent on a seasonally adjusted basis from the tepid pace in August.
While rare properties sold with multiple offers, many sellers failed to land a deal on nights reserved for viewing offers.
Mr. Parekh recently worked with one set of buyers who were in no rush to move, but they were willing to pounce if they found a larger house at a tempting price.
A renovated three-bedroom house near Christie Street and St. Clair Avenue West was listed with an asking price above the $1.9-million mark early this year, then reduced to $1.8-million.
The semi-detached house at 150 Rushton Rd. was then relisted with an asking price of $1.65-million and an offer deadline.
The house was clearly a cut above the properties the couple had been looking at in that price range, says Mr. Parekh, and the clients were keen on the location in the area near Wychwood Park.
Home Run: With a $1.5-million budget for a new home, what did this expecting Toronto couple buy?
Still, the couple was reluctant to pay a large amount above asking and they didn’t want to waste time with a lowball offer.
Mr. Parekh recommended that the couple submit a bid at the price they were willing to pay without worrying about the competition.
No rival bidders came to the table, says Mr. Parekh, whose clients secured the house for $1.675-million, or $25,000 above asking.
He figures the listing might have appeared stale to some buyers because the property had languished at higher prices.
The deadline for submitting bids likely discouraged house hunters who figured the homeowners were expecting a large premium to the asking price.
“All of these factors lined up to us being the only ones who put in an offer.”
He notes that the original asking price was not a glaring misjudgment because a comparable home in the area had recently sold above $1.9-million.
“This is a common story in 2026,” he says of the vicissitudes of the market.
The Listing: The smallest condos are being hit hardest by the market decline
Mortgage broker Leah Zlatkin, an expert for LowestRates.ca, says buyers are tussling with tough decisions at the moment. She receives many calls from clients who have their financing lined up but wonder if home prices in Ontario have reached bottom after a lengthy downturn.
“I do have people who are preapproved and have been preapproved for two years. They call me every single week and say, ‘do you think we’re at the bottom yet?’”
Ms. Zlatkin points out that recoveries in real estate are rarely V-shaped and the market can remain flat for some time before a renewed upswing.
Values have decreased by more than 25 per cent from the heights of 2022 for many properties in the GTA. That dynamic often provides an opportunity for existing homeowners to move up because a larger buyer pool typically supports the value of entry-level homes more than those in higher price brackets.
In today’s uncertain environment, many people who have the option to trade are cautious about taking the leap, she says.
Meanwhile, Ms. Zlatkin points out, fixed-term mortgages have been getting more expensive in recent weeks, and she expects that trend to continue based on rising yields for long-term bonds, which in turn influence the rates that lenders set.
Mortgage rates for loans with fixed terms of three or five years have recently been hovering around 4.24 per cent at the low end, says Ms. Zlatkin, but mainstream lenders have been offering rates closer to 5 per cent.
Ms. Zlatkin says some buyers are holding off because they figure they may get a lower home price or mortgage rate in the future, but that’s an unpredictable outcome.
Buyers who are in a stable financial position are likely better off jumping in when they find the right house, in her opinion.
This rewards program wants to help you purchase a home – no credit card required
“The lowest price possible and lowest mortgage rate might not line up.”
Homes have been sitting on the market for longer stretches in many areas and price brackets, and many sellers with properties listed at the moment need to sell.
People with a down payment saved up have a chance to buy at a lower price, she points out.
“They have a huge opportunity to negotiate,” she says, adding that motivated sellers might be willing to take less than they were hoping for just to get a property sold.
Mr. Parekh says the uneven results are making many potential sellers wary.
Homeowners who have bought in recent years are asking if they can sell for more than they paid, Mr. Parekh says.
Those who have had time to build up equity question whether trading up to a new property is worthwhile.
“They can trade up – but should they? There are a lot of doubts.”
The uncertainty arises from “what ifs” in the macroeconomic outlook, says Mr. Parekh, as people ponder what would happen if they lose their job or interest rates rise or real estate prices continue to decline.
Long-time owners, meanwhile, are still holding out for a turnaround after prices entered a slump in the first quarter of 2022.
Last year at this time many people delayed listing as they gambled that the market would improve. But the pace of new listings has slowed even more because many homeowners figure they won’t fetch the price they want, Mr. Parekh says.
Mr. Parekh is hearing from some clients who are prepared to move but they have put off listing until early 2027.
“Now it’s even slower, and there is even more uncertainty, so I think people are waiting.”