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Home sales across the Greater Toronto Area declined sharply in January, recording their steepest monthly fall in almost 11 months, as economic uncertainty continued to keep buyers cautious. Data released by the Toronto Regional Real Estate Board showed seasonally adjusted sales fell nearly 10% from December, while prices also extended their downward trend. The home price index dropped for the eighth consecutive month, reflecting weaker demand amid concerns over affordability and broader economic risks. Ongoing uncertainty linked to Canada's economic outlook and trade relations with the United States has weighed on long-term purchasing decisions. With new listings also declining, market participants expect elevated supply levels to limit any near-term price recovery, while overall sales activity is likely to remain subdued through 2026.
Home sales in the Greater Toronto Area declined sharply in January, marking the steepest monthly fall in almost a year, as economic uncertainty discouraged buyers from making long-term housing decisions, according to data released by the Toronto Regional Real Estate Board. Advertisement
Seasonally adjusted home sales fell 9.9% month-on-month to 4,795 units, extending a run of declines that has persisted for the past four months. The drop was the largest since February last year and pushed sales to their lowest level since May, highlighting the growing caution among prospective buyers despite some improvement in affordability conditions.
Prices also continued to weaken. The board's home price index declined 1.7% from December, after seasonal adjustment, to CAD 941,200, marking the eighth consecutive monthly decline. On an annual basis, the index was down 8% in January, underlining the sustained downward pressure on valuations across the region.
The Greater Toronto Area, which includes Toronto and four surrounding regional municipalities, has been particularly sensitive to shifts in economic confidence. According to the board, uncertainty around the broader economic outlook has outweighed the impact of lower prices and borrowing costs for many households considering homeownership.
Daniel Steinfeld, president of the Toronto Regional Real Estate Board, said the housing market was reflecting the concerns many households were experiencing as they looked ahead to 2026. He noted that while affordability had improved compared to recent peaks, uncertainty continued to influence major financial decisions such as purchasing a home.
Canada's economy has been affected by global trade tensions, including the ongoing U.S.-led trade dispute. While the United States-Mexico-Canada Agreement has so far protected a large share of Canadian exports from additional tariffs, the agreement is scheduled for review by a July 1 deadline, adding another layer of uncertainty to the economic environment.
Market activity indicators also pointed to softer conditions. On a year-on-year basis, home sales in January were down 19.3%, while new listings declined 13.3%, suggesting that both buyer and seller activity has moderated. Despite the fall in new supply, overall inventory levels remain elevated compared to recent years, contributing to continued pressure on prices.
Looking ahead, the Toronto Regional Real Estate Board said elevated supply levels are likely to keep price growth subdued through 2026. Overall home sales activity is expected to remain broadly in line with levels recorded over the past three years, rather than staging a strong recovery. The outlook suggests that while the market may stabilise, a decisive turnaround is unlikely in the near term as economic uncertainty continues to shape buyer behaviour.
Source - Reuters
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