Markets like this one make people nervous. The headlines are loud — prices down, sales down, tariff uncertainty, economic anxiety. I get it. But I've also been watching what's happening beneath the surface, and I think it tells a different story.
The honest numbers
Yes, the GTA average home price has dropped below $1 million for the first time since 2021. Yes, sales are down about 20% from a year ago and inventory is elevated. The condo market is under the most pressure, with prices continuing to fall. These are real numbers and I'm not going to sugarcoat them.
What's happening beneath the surface
Mortgage pre-approvals are running well ahead of last year's pace. Buyers aren't disappearing — they're doing their homework. In certain segments, especially entry-level homes in established neighbourhoods, multiple offers are starting to show up again. The demand hasn't vanished. It's waiting for a signal.
The rate environment
The Bank of Canada is holding steady at 2.25% and most expect that to continue through the year. Tariff uncertainty has actually pushed bond yields lower recently, which means fixed mortgage rates may have a little more room to come down. The 5-year fixed and variable rates are currently sitting in roughly the 3.75–3.90% range.*
For anyone approaching a mortgage renewal, this is the year to get competitive quotes. The difference between the best and worst offers on the market can represent $50,000 or more in borrowing power. Use our mortgage calculator to see what current rates mean for your specific situation.
A factor that doesn't get enough attention: AI and job market uncertainty
Beyond tariffs and rates, there's another factor weighing on confidence that doesn't get enough attention. The rapid integration of artificial intelligence into workplaces across nearly every industry is creating real uncertainty in the job market. People who aren't sure about the stability of their income aren't rushing to take on a mortgage — and that hesitation is showing up in the numbers. It's one more reason buyers are cautious, and one more reason this market rewards patience and preparation over impulse.
For landlords and investors
The rental market is more competitive than it was a year ago. Rents have softened as new supply hits the market. But the fundamentals remain — TRREB data shows renters need roughly $600/month more than they can currently afford to make the jump to ownership. That means your tenants are staying put.
In fact, many tenants are now actively requesting rent reductions. In some cases, it may actually make sense to consider it. Keeping a quality tenant at a slightly lower rent can be far more valuable than a vacancy, turnover costs, and the risk of a problematic replacement in a market where tenants have more leverage than they've had in years.
The opportunity on the acquisition side is also worth paying attention to — purchase prices are down meaningfully while rents have held relatively steady. The math toward positive cash flow is improving in a way we haven't seen in a long time.
Landlord note: If your tenant has asked for a rent reduction, don't say yes or no before getting advice. There's a right way to handle it that protects your interests and keeps your investment performing. Reach out — we'll walk you through it.
The bottom line
The smartest thing anyone can do in this market is stay informed and be strategic. Don't react to headlines. Understand the data. Whether you're managing a rental property, considering buying or selling, or just want a second opinion on how any of this applies to your situation — that's exactly what we're here for.
* Rate estimates are approximate as of late February 2026 and vary by lender, term, and borrower profile. Speak with a mortgage broker for a rate specific to your situation.
