Toronto Sales Recover Despite Annual Decline

Home sales in the Greater Toronto Area increased modestly in October, ending two consecutive months of decline as lower property prices helped offset the impact of higher mortgage borrowing costs.

Seasonally adjusted sales rose 1.2% from September to 5,274 transactions, according to figures released on Wednesday by the Toronto Regional Real Estate Board. The board's benchmark home price index increased 0.1% during the month to approximately C$928,800, suggesting that prices were beginning to stabilise after an extended period of weakness.

The improvement was less encouraging when measured against last year's activity. Actual sales fell 7.9% compared with October 2025, while new property listings declined 11.9%. Benchmark prices were 4.3% lower than a year earlier, reflecting continued uncertainty among buyers and sellers. The Bank of Canada raised its benchmark interest rate to 2.5% last week, its first increase in three years, adding pressure to mortgage affordability. However, lower property prices have reduced the amount some buyers need to borrow, partly compensating for higher financing costs.

The data indicate a market attempting to stabilise rather than entering a sustained recovery. Buyers retain considerable negotiating power, but the combination of limited new listings and uncertain interest rates complicates expectations. Toronto's housing market remains sensitive to changes in borrowing costs, household confidence and the wider economic outlook. Whether October's improvement continues will depend on how prospective purchasers respond to monetary tightening and whether sellers adjust their price expectations to current demand.