SPRING INTO ACTION - Market Summary 2026

Jared Olmsted
Feb 24
4 min read

Updated: 4 days ago

SUTTON QUANTUM MARKET EXECUTIVE SUMMARY

Seven Key Factors Influencing Real Estate

Population growth
Economic conditions
Ownership affordability
Investor activity
Replacement cost
Housing supply
Consumer confidence

Shaun highlighted that investor activity has decreased, and the high cost of building is freezing the pre-construction market, leading to limited new housing supply. Consumer confidence is also a key influencer particularly due to economic uncertainty and trade policy with the U.S.

Current Challenges and Recovery Projections

Shaun noted that the market has been through significant fluctuations since 2025, with interest rates and tariffs affecting activity. While the worst of the market correction may be over, consumer confidence remains fragile. Economic growth is expected to slow to 1.1% in 2026 with a recovery projected for 2027. According to a survey by the Bank of Canada, more people are expected to sell their homes while buyer intentions are starting to increase in 2026 and 27. Inflation is expected to remain around 2% with interest rates likely to stay neutral.

Bank Predicts Stable Interest Rates

The Bank of Canada is unlikely to reduce interest rates due to supply constraints and concerns about sparking inflation. Shaun predicted that there will be no change in interest rates through 2026. Buyers should take advantage of current favorable conditions - low interest rates and high inventory. A gradual market recovery is predicted in the coming years as sales and listings balance out.

GTA Real Estate Market Update

January sales have seen the steepest decline with activity 33% below the 10-year average. Average prices are down 22% in the past 4 years, but still 54% higher than 10 years ago. The decline in prices is largely due to a surge in supply combined with lower demand. However, this oversupply is starting to normalize as new condominium completions slow down, and the market is beginning to show signs of stability. Average prices are expected to decrease by 3-5% in 2026. Likely closer to 2%.

GTHA Condo Market

Shaun presented data showing that smaller condos (under 600 square feet) have seen the largest price decreases, while larger units (over 900 square feet) have been the most resilient in the GTA market over the past four years. He noted that affordability has improved for both buying and renting, with mortgage costs and condo fees decreasing 22% in the past two years. New condo sales reached an all-time low in 2025 with 1,599 sales. With this trend, Shaun predicted that there would be no new condo completions by 2030.

On the Flip Side

There is a significant shift in the condo market from completed projects sales overshadowing pre-construction units for the first time. MLS condo turnover is at a record high of over 80,000 units rented or sold last year. He explained that the high cost of building condos relative to buyer demand has led to project cancellations. While some costs are starting to decrease due to fewer projects, development charges remain a significant barrier to lowering condo prices in Toronto.

Shaun predicted a multi-year adjustment in the condo market and there will be a supply overhang in the next few years due to upcoming completions of projects. However, the reality is that there will be no new condo supply by 2029-2030. Demand will outstrip supply at that time and the condo market will likely tighten.

GTA Population Growth

We saw a spike in immigration between 2023-2024 from an average of 100,000 increased per year to 250,000. However, the population in the GTA only increased by 18,000 in 2025. This massive shift in population growth is almost entirely due to a net decrease in non-permanent residents. We are anticipating that immigration will return to normalized growth about 100,000 per year. This will likely coincide with 0 condo completion in 2030.

Quantum Takeaway

Covid created an artificial demand and prices and activities seems to have resumed to pre-Covid levels. It was further noted that the prediction is for a condominium supply deficit by 2030. This would indicate that prices in condominiums will increase around that time.

Development costs are prohibitively high in the GTA. It is estimated that development costs are at about $130,000 for each condominium unit. These municipal development charges are collected to fund infrastructure. However, the development charges in Toronto have increased 171% since 2017. With back to work trends, we are seeing an urbanization trend. Coupled with reduced new projects, once the 60,000 units are absorbed, we should start to see condo prices recover around 2030.

Tariffs remain a wildcard for our manufacturing sector. It was discussed that Canada in general has an economy that is more focused on service growth and agriculture and while we diversify our trading partners, 75% of our exports do go to the United States. This means that the auto sector, steel and aluminum will continue to be affected.

Overall, the takeaway was that 2026 is a recovery year. While we will face headwinds in the renegotiation of our trading partners, we might see a downturn in pricing of 3 to 5% in some sectors. There is a lot of pent up demand in the market. Looking at all the data, it’s likely a good time to buy if you’re thinking of getting into the market.

Disclaimer

Source: Urbanation, 2026. All rights reserved. No part of this publication may be reproduced in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the broker owner at Sutton Quantum.

Full GTA Housing Market Update presentation from Shaun Hildebrand

Downloadable PDF of the Spring Kickoff Executive Summary