Looking at the national picture at the halfway point for 2026, the uptick in sales in Ontario and British Columbia is lifting economist Rishi Sondhi's forecast for the year, even as markets in other provinces cool.Supplied
As Toronto-area home buyers test their mettle again, the strengthening trend in sales appears set to continue in the second half of the year, predicts Toronto-Dominion Bank economist Rishi Sondhi.
“We’re seeing demand come back,” says Mr. Sondhi, who notes that listings have also been shrinking so far this year compared with the same period last year.
That gradual improvement in balance between supply and demand in the Greater Toronto Area will lead to firmer prices in 2027, he adds in an interview.
“We’re not there yet.”
The renewed energy in Toronto and other parts of Ontario stems partly from the release of pent-up demand and better alignment between “price expectations” of buyers and sellers, Mr. Sondhi says.
“That might be helping to grease the wheels for transactions.”
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The most avid buyers in the Toronto real estate market tend to be clustered in the bracket between $1-million and $1.5-million, which in many areas is the threshold for buying a single-family home.
Below the $1-million mark, aspiring condo buyers are often watching for prices to fall farther. Move-up buyers are willing to trade in the bracket between $3-million and $5-million if homes are sharply priced, agents say.
In the upper echelons of the market, an air of uncertainty lingers, according to Andre Kutyan, broker with Harvey Kalles Real Estate.
He points to his recent sale of an older, well-maintained bungalow in the area around Caledonia Road and Lawrence Avenue West with an asking price of $849,000. The property at 16 Jocada Rd. drew eight offers and sold for $1.2-million.
“Everyone loves the glory of selling multimillion-dollar homes, but I’m better off selling $1.5-million homes all day long,” says Mr. Kutyan. “The high-end buyers are a lot more hesitant.”
Mr. Kutyan points to the example of a five-bedroom Lytton Park home he listed with an asking price of $6.995-million in March and sold for $5.518-million in June.
During that time, the house at 264 Cortleigh Blvd. drew one offer early on, but the sellers were not willing to accept the bid.
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Mr. Kutyan cut the asking price by a hefty $500,000 to $6.495-million and co-ordinated an agents’ open house with other agents who had listings in the neighbourhood in order to generate some traffic.
A couple of buyers came forward and, after some haggling, the seller accepted a conditional offer, but that deal fell through.
“The buyer backed out. The seller was happy they walked away,” Mr. Kutyan says of the contentious process.
At that point, the sellers were willing to sell for significantly less than they were originally hoping for, as long as the deal was firm.
Mr. Kutyan returned to the first buyer who submitted a bid in March, and the two sides agreed to a deal at $1.477-million below the original asking price.
Halfway through 2026, four properties have traded above the $10-million threshold compared with six in the same period last year, he notes.
The sample size is small, but Mr. Kutyan believes the decline in volume does reflect a diminishing buyer pool. In many cases, he adds, the homeowners in the luxury segment are sellers only. They are not buying another property.
“Our market at the ultrahigh-end is shrinking,” he says.
Mr. Kutyan says some of his clients with a business overseas or in the United States are relocating to another home they own outside of Canada.
“If they have business elsewhere, they’re incentivized to move there.”
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Another cohort with deep pockets are leaving their money in financial markets because they feel there is no rush to buy real estate.
“The buyers are there – even at the high end, they are there, waiting for the prices to come down,” he says.
Meanwhile some Toronto homeowners who put off listing during the doldrums of early spring are rushing to launch in July. Some sellers are encouraged by improving sales in the late spring while others want to get ahead of competing listings in the fall.
Mr. Kutyan has a handful of listings launching in the first two weeks of July.
A recent Bank of Canada report on financial stability caused a stir amongst some homeowners when the report cautioned that approximately 10 per cent of GTA borrowers renewing their mortgage in 2027 may not be able to qualify for refinancing.
Agents say some potential sellers are calling to ask if they should list this year in case homeowners burdened with debt are forced to sell.
“It was making waves,” TD’s Mr. Sondhi says of the report, but he sees little reason for concern because most homeowners will be able to renew their mortgages with the same lender.
Financial pressures on homeowners have been elevated for a couple of years as many buyers who purchased with ultralow interest rates starting in 2020 have renewed their mortgages at higher rates.
TD economist Maria Solovieva points out in a note to clients that the largest wave of renewals is in the past. The share of borrowers facing acute stress remains limited, she adds.
In Mr. Sondhi’s view, any potential increase in listings from increased duress will be more than offset by the other factors driving listings down.
Condo completions will be lower this year in the GTA compared with the burgeoning supply in recent years, for example, which in turn will mean fewer new units are likely to be listed for sale.
At the same time, many homeowners may not be selling if they are not getting the prices they want, he says.
“Our forecast is for a slowdown in supply across Canada, but mostly Ontario,” he says.
Looking at the national picture at the halfway point for 2026, Mr. Sondhi said the uptick in sales in Ontario and British Columbia is lifting his forecast for the year, even as markets in other provinces cool.
The economist steeply downgraded this year’s forecast for housing resales and price growth across Canada in March as a subdued economy, winter storms, geopolitical uncertainty, and cost of living pressures kept buyers on hold in the first quarter.
Mr. Sondhi is more upbeat heading into the second half of the year. He cautions, however, that weak population growth and lacklustre hiring in the job market will likely keep national sales below pre-pandemic levels.