Since March, each month recorded more home sales than the same month the year before. That has led many to believe the GTA housing market had finally bottomed and that a stronger second half of the year was on the way.
TRREB even stated that “average selling prices could level off in the second half of this year.”
So… are we truly at the floor? Let’s look past the headlines and break down what’s really happening.
The Recovery Took a Pause
July’s numbers showed a slight cooling in pace:
- Home Sales: 5,995 transactions (-0.9% YoY)
- New Listings: 14,484 listings (-17.8% YoY)
At first glance, fewer listings sound like a win for sellers, less inventory generally means less competition. But that is only half the story.
Supply Has Returned to Normal
With just over 14,000 new listings, July supply have returned to normal pre-pandemic norms. The flood of inventory that defined late 2024 and early 2025 is officially fading.
- Months of Inventory (MOI): Improved from 5.83 months at the start of 2026 down to 4.35 months today.
This is a meaningful shift as excess supply was pushing prices downward over the past year.
Demand Is Still the Missing Piece
This is where many market narratives miss the mark. While supply has normalized, buyers still haven’t returned.
- For five consecutive years, July sales have hovered under the 6,000 mark.
- Historically, a healthy July averages closer to 8,000 sales.
- That means overall demand is still roughly 25% below normal levels.
Because buyer activity remains historically low, prices continue to soften:
- Average Selling Price: $1,003,956 (-4.5% YoY)
- MLS® Home Price Index: -4.6% YoY
With affordability still stretched, economic uncertainty lingering, and many Canadians waiting for greater confidence before making the biggest purchase of their lives, I don’t expect demand to recover overnight.
Strategic Takeaways
For Buyers: Strong Negotiating Leverage
You still hold incredible leverage in today’s market!
Don’t let “market bottoming” headlines rush you. Buy when you are financially prepared, not because someone claims prices are about to jump.
For Sellers: Strategic Pricing & Presentation
Realistic pricing remains the winning strategy. With fewer new competing listings on the market, well-priced and beautifully presented homes have a much better chance to stand out and capture active buyers.
While there are fewer buyers, those booking showings are typically serious and ready to buy the right home. Make every showing count by accommodating requests and presenting your home at its absolute best.
You only get one chance to make a first impression. In today’s market, that one showing could be the buyer who writes the offer.
My Thoughts
A housing market doesn’t bottom out just because reports says it will, it bottoms out when buyers come back.
Inventory is no longer our biggest hurdle; demand is. While the market is undeniably healthier and more balanced than it was six months ago, we aren’t at the point where prices are ready to trend upward just yet.
As always, every neighbourhood behaves differently. If you’re thinking about buying or selling, let’s look at what’s happening in your specific area before making your next move.