Ontario’s housing market is entering 2026 with conditions favouring buyers, as listings linger longer and purchasers grow increasingly selective, according to industry experts.
“In a hot sellers’ market — which we’re not necessarily experiencing right now — most property types sell, even if the home is less than ideal,” said Brittany Kostov, industry relations officer with Zoocasa. “Right now, homes with challenging features are sitting.”
Properties that might have sold quickly during the pandemic-driven buying frenzy of 2021 and 2022 — such as those on busy streets, with awkward layouts or in need of updates — are now spending months on the market. Buyers, Kostov said, are being far more discerning at the start of 2026.
“If it’s not a 10-out-of-10, magazine-shoot-ready home, it’s sitting,” she said.
Kostov pointed to a two-bedroom corner-unit condo in Mississauga listed at $790,000 that drew multiple showings but no offers. The sellers ultimately decided to rent the unit instead. In another example, a Toronto east-end townhouse with a less-than-ideal floor plan has been on the market since February 2025, most recently listed at $750,000 — well below the $980,000 it sold for within a week in 2021.
“The sellers weren’t under pressure,” Kostov said. “The advice was to relist in the spring.”
Spring market outlook
Looking ahead to the spring market, Kostov expects stability rather than a sharp rebound.
“I think we’re seeing more stabilization, not a steep decline in prices,” she said. “There will be more activity in the spring, but not a sudden surge of buyers.”
She added that Ontario hasn’t seen a traditional spring market since 2020, with activity increasingly starting earlier in the year — often in early February, before Family Day — as sellers test the market.
Interest rates and timing decisions
That early spring period also coincides with the next interest rate announcement from the Bank of Canada, scheduled for Jan. 28. The policy rate currently sits at 2.25 per cent, with mortgage rates hovering around four per cent.
But waiting for a rate announcement may not benefit buyers, warned mortgage broker Leah Zlatkin of LowestRates.ca.
“Fixed mortgage rates don’t wait for Bank of Canada announcements,” Zlatkin said in an email. “Lenders can raise fixed rates based on market conditions, meaning delays can lead to higher rates instead of lower ones.”
“Homeowners who value predictable payments shouldn’t wait for the perfect moment,” she added. “In this environment, waiting can mean paying more while gaining very little.”
Condo market poised for recovery
Although condo sales have softened in recent months, Kostov expects improvement later in 2026.
“In major urban centres, condos will likely spend much of 2026 stabilizing, with improved activity emerging later in the year,” she said. “I truly believe 2026 will be a rebuilding year for the condo market.”
Some investors are exiting the condo market to pursue other opportunities, she noted, creating potential openings for buyers at more accessible price points.
Preparing to sell in 2026
For homeowners planning to sell, Kostov said presentation will be critical in a more competitive market.
“Get your home in showing shape,” she advised. “Declutter, refresh scuffed walls with paint, remove obstacles and do a deep clean. Make it easy for buyers to envision themselves in the space.”
Working with a professional home stager can also help define rooms and maximize appeal, she added.
Consumers seeking guidance can also consult the Real Estate Council of Ontario, which offers tools and resources for working with licensed real estate professionals.
As 2026 unfolds, experts say informed buyers and well-prepared sellers will be best positioned to navigate Ontario’s evolving housing market.