Condo vs Freehold: Where is the 2026 market leaning?
A hand using a pen to point to a bar graph on a piece of paper
January 2026 numbers from the Toronto Regional Real Estate Board show a market in transition. Sales are down, prices are softening, and buyers are moving more cautiously. But beneath the slowdown lies opportunity, particularly in the condo segment.
Let’s unpack what the data is really telling us.
The Overall Market Is Cooling
Across all property types:
Sales: 3,082 (↓ 19.3% year-over-year)
Average Price: $973,289 (↓ 6.5%)
New Listings: ↓ 13.3%
Average Days on Market: ↑ 21.6%
This is a clear shift from the ultra-competitive conditions we saw in previous years.
When sales fall nearly 20% and homes are sitting longer, it tells us:
Buyers are more selective.
Financing costs and affordability are influencing decisions.
Sellers must price more strategically.
And that last point — pricing — is where opportunity emerges.
Ground-Oriented Homes Are Feeling the Pressure
Freehold sales have declined 13.6% year-over-year, while semi-detached homes dropped 19.2%. Prices have softened as well, with detached homes down 7.4% and semis down 9.7%.
Despite those declines, price points remain high.
The average detached home sits near $1.28 million, and semis are averaging roughly $946,000. With mortgage rates hovering around 4.25%, borrowing conditions have improved significantly compared to last year’s peak.
While this easing has restored some purchasing power and boosted buyer confidence, affordability ceilings remain a reality at today’s price points, and demand continues to gravitate toward more attainable segments.
Why Condos Are Regaining Strategic Appeal
The average condo price in January came in around $605,000 — nearly half the price of a detached home. That price gap matters more today than it did in ultra-low rate environments.
While condo sales were down year-over-year, the decline reflects broader market hesitation rather than structural weakness.
Historically in the GTA, entry-level housing segments often stabilize and rebound first once confidence returns. Condos offer liquidity, rental flexibility, and a lower barrier to entry, which makes them particularly attractive when buyers are recalculating risk.
For investors thinking long-term, this environment offers something that hasn’t been widely available in recent years: breathing room.
The Economic Backdrop Supports Stability
Real GDP growth sits at 2.6%, inflation is at 2.4%, and employment growth remains positive. While Toronto’s unemployment rate is elevated at 8.1%, the broader picture is not one of recessionary collapse.
Inflation trending near the Bank of Canada’s target range signals stabilization. Markets typically move in anticipation of rate adjustments rather than waiting for them to happen.
When borrowing conditions begin to ease, even gradually, demand often returns first to the most affordable segments of the market.
That dynamic tends to favour condos.
A Market That Rewards Strategy
What January’s numbers ultimately reveal is a shift in power dynamics.
This is no longer a momentum-driven market; it’s a strategy-driven one. Buyers who understand value and act decisively can negotiate from a position of strength. Sellers who price accurately are the ones achieving results.
Markets don’t announce when they’ve reached opportunity zones. They simply quiet down — and reward those paying attention.
