Home sales across the Greater Toronto Area (GTA) increased for the first time in three months in October, with the lower property prices helping offset rising borrowing costs and supported affordability, stated the data from the Toronto Regional Real Estate Board (TRREB).
Seasonally adjusted home sales rose 1.2% month-over-month to 5,274 units in October, following two consecutive months of declines. The board’s seasonally adjusted home price index also edged up 0.1% from September to CUSD 928,800 (USD 663,523.36).
The GTA, which includes Canada’s most populous city and four surrounding regional municipalities, has been experiencing a period of subdued housing demand amid changing mortgage costs and affordability concerns.
“GTA homebuyers continued to benefit from substantial negotiating power on price over the past year,” said Jason Mercer, TRREB’s chief information officer.
He added that although borrowing costs had increased following higher inflation, lower selling prices had helped limit the impact on monthly mortgage payments, keeping home affordability in the North American country relatively stable.
However, the October improvement in sales comes against a weaker annual comparison. GTA home sales were down 7.9% year-over-year, while new listings declined 11.9%.
The home price index was also 4.3% lower than in October last year.
The latest recovery in Toronto’s housing market comes as Canadian borrowers face renewed pressure from higher interest rates.
The Bank of Canada raised its benchmark interest rate by 25 basis points to 2.50% last week, marking its first increase in three years. The move was aimed at preventing higher energy costs from feeding into broader inflation.
Higher borrowing costs have created additional uncertainty for prospective homebuyers, particularly those already dealing with stretched housing affordability.
Shaun Cathcart, senior economist at the Canadian Real Estate Association (CREA), had earlier warned that rising fixed mortgage rates could weaken housing demand and push some buyers to delay purchasing decisions.
“With housing affordability already stretched, the big question going forward is how much farther will the bank have to go to keep a lid on inflation next year?” Cathcart said.
He added that uncertainty surrounding the future direction of interest rates could send more buyers back to the sidelines.
Developments in Toronto also defy broader trends across Canada’s housing market, where declining new listings and relatively stable overall supply have influenced buyer and seller behavior.
New listings resumed their downward trend in September 2026 after recovering in August, falling 1.8% month-over-month. Overall, new supply has generally been declining since early 2025.
CREA Chair Garry Bhaura said the increase in fixed mortgage rates during the fall housing season had made conditions more challenging for prospective buyers.
However, he noted that higher borrowing costs could also leave buyers with more properties to choose from and greater negotiating power.
For sellers, he said, adopting a carefully considered pricing strategy would become increasingly important.
“Nationally, the sales-to-new listings ratio eased to 48.8% in September from 49.1% in August, as the decline in home sales slightly exceeded the fall in new supply,” CREA noted.
“The long-term average for the measure stands at 54.7%, with readings between approximately 45% and 65% generally indicating balanced housing market conditions,” it added further.
Canada had slightly more than 200,000 properties listed for sale across its Multiple Listing Service (MLS) systems at the end of September, representing a 1.8% increase from the same period last year. The figure was also marginally above the long-term average.
The North American country had 4.9 months of housing inventory at the end of September, slightly higher than during the summer but broadly in line with its historical average.
Based on CREA’s inventory benchmarks, a seller’s market is generally associated with supply below 3.6 months, while a buyer’s market typically emerges when inventory exceeds 6.4 months.
Despite a relatively stable national housing supply, property prices have come under pressure in several parts of the country.
The National Composite MLS Home Price Index declined 0.4% month-over-month in September, ending four months of broadly stable prices.
The decline reflected renewed weakness in Ontario, where housing demand softened, alongside moderating price gains in the Prairies, Quebec, and Atlantic Canada.
On a year-over-year basis, the non-seasonally adjusted national composite home price index fell 3.4% in September, marking the first time since January that the annual decline had widened.
Canada’s non-seasonally adjusted average home price stood at CUSD 666,538 in September, down 1.6% from the same month in 2025.