Will Toronto and GTA Home Prices Drop Further in 2027?

TORONTO & GTA REAL ESTATE | 2027 HOUSING MARKET OUTLOOK

By Tom Sachdeva, Salesperson | RE/MAX Royal Team Sachdeva Realty
Updated November 8, 2026

Will Toronto and GTA home prices drop further in 2027?

It's a question many homeowners, buyers and investors are asking as we approach the end of 2026. Home prices have declined from last year, mortgage costs remain a concern, and economic uncertainty continues to affect people's confidence.

After more than 20 years working in Toronto and GTA real estate, I've learned that broad market predictions can be useful, but they rarely tell the complete story of an individual property.

A downtown Toronto condo, a bungalow in Scarborough and a detached house in Whitby can experience very different market conditions.

This article looks at what the latest numbers tell us, what major forecasters are expecting and what I believe buyers and sellers should consider before making a decision.

If you're deciding whether to purchase now or wait, I've also written a separate guide: Is Now a Good Time to Buy a House in Toronto or Wait Until 2027?

1. What Do the Latest Toronto and GTA Market Statistics Tell Us?

The Toronto Regional Real Estate Board's October 2026 market report, released November 4, gives us a useful starting point.

Source: TRREB October 2026 Release | TRREB Market Watch

There is an important detail behind these annual declines. On a seasonally adjusted basis, both the average selling price and the benchmark edged higher from September.

That doesn't establish a recovery, but it also means we shouldn't assume prices are falling faster every month.

The average selling price is influenced by the mix of homes sold. I would examine the price-index trend and recent comparable sales before using a citywide percentage to estimate what a particular home is worth.

2. What Are Economists Forecasting for Toronto Home Prices in 2027?

There isn't one universally accepted forecast for Toronto housing prices.

Different organizations study different geographic areas, property types and measures. That's why their projections can sometimes point in different directions.

Sources: CREA October 2026 Forecast | CMHC July 2026 Outlook | TD Economics, May 7, 2026

Notice that CREA is forecasting national average prices, CMHC is forecasting the broader Toronto metropolitan resale market, and TD's specific analysis focuses on GTA resale condominiums.

These forecasts also have different publication dates. The CMHC and TD outlooks predate the Bank of Canada's October interest-rate increase, so their assumptions may no longer fully reflect current financing conditions.

My interpretation: A gradual recovery in the broader housing market is possible in 2027, but that doesn't rule out further declines in certain property types, particularly where inventory remains difficult to absorb.

3. Three Factors That Could Push Home Prices Lower in 2027

Mortgage Rates Remain Higher Than Buyers Expected

On October 28, 2026, the Bank of Canada increased its policy interest rate by 0.25 percentage points to 2.50%.

The Bank's October outlook projected consumer inflation averaging approximately 3.1% in 2027. It also acknowledged that further interest-rate increases could be necessary.

This matters because borrowing costs influence how much buyers qualify for and how much they're comfortable spending.

The policy rate isn't the mortgage rate a buyer receives. Variable mortgage rates generally respond to lenders' prime rates, while fixed rates are influenced by bond yields and other funding costs.

I would be cautious about any housing forecast that assumes mortgage rates must decline next year.

Source: Bank of Canada Rate Announcement | October Monetary Policy Report

Employment and Consumer Confidence Weaken

According to Statistics Canada, Ontario's unemployment rate rose to 7.3% in October 2026.

Employment stability is important when households consider taking on a large mortgage.

Trade uncertainty, higher living costs and concerns about future income can cause qualified buyers to postpone a purchase, even when asking prices become more attractive.

For sellers, fewer confident buyers can lead to longer marketing periods and greater pressure to negotiate.

Source: Statistics Canada, October 2026 Labour Force Survey

Too Many Similar Properties Compete for Buyers

This is particularly important in the condominium market.

Buyers may have several comparable suites available in the same building or neighbourhood. If those properties offer similar layouts and features, sellers have to pay close attention to pricing.

For investors, rental income is another consideration. CMHC's 2026 rental-market research found that increased supply and slower population growth were easing asking rents in major Canadian markets, including Toronto.

When mortgage payments, condo fees, property taxes and maintenance costs rise faster than rental income, some investors may reconsider holding their properties.

That doesn't mean every investor will sell or every condo building will experience the same price decline. It means the financial fundamentals deserve closer attention.

Source: CMHC 2026 Mid-Year Rental Market Update

4. What Could Help Toronto Home Prices Stabilize?

Home prices could stabilize if more buyers return to the market, available inventory is gradually absorbed and borrowing costs become more predictable.

There is another important factor: future housing supply.

CMHC's September 2026 Housing Supply Report found that Toronto would need to increase annual housing starts by at least 50% over the next decade to restore affordability to pre-pandemic levels.

The report also highlighted weakness in new ownership-housing construction, including condominium development.

In the short term, buyers may benefit from existing inventory and weaker prices. But if new construction remains depressed and demand eventually recovers, future supply could become a problem.

My view: We should watch both sides of the market. Today's slower demand can put downward pressure on prices, while reduced construction can create supply challenges several years from now.

Neither trend guarantees what prices will do in 2027.

Source: CMHC September 2026 Housing Supply Report

5. Which Toronto and GTA Property Markets Deserve Closer Attention?

One thing I always explain to clients is that there is no single Toronto housing market.

The type of property, its location, condition and available competition can influence its value as much as the broader economic outlook.

Toronto Condominiums

If you're considering downtown Toronto condos for sale, I would start by reviewing recent sales in the same building.

Compare maintenance fees, usable square footage, floor level, parking, building finances and competing listings.

A citywide condo forecast doesn't tell us whether an individual unit is priced appropriately.

Scarborough Detached Homes and Bungalows

Having lived in Highland Creek for many years, I've seen how much the characteristics of an individual home can matter.

When comparing Scarborough homes for sale, I would look closely at the street, lot size, property condition, renovations, basement configuration and genuinely comparable recent sales.

A well-maintained detached house in an established neighbourhood may appeal to a very different buyer than an investor-oriented condominium.

Pickering, Whitby and Durham Region

Durham Region also includes different price points and buyer preferences.

A family purchasing a detached property in Whitby may prioritize living space, schools, commuting options and neighbourhood amenities.

For these buyers, I would compare local sold prices, available supply and the full cost of ownership rather than applying a GTA-wide percentage to the property.

6. What Should Buyers and Sellers Watch in 2027?

I wouldn't declare that the market has recovered or that another major decline is coming based on one month's statistics.

Instead, I would look for several months of consistent evidence:

• Changes in the MLS® Home Price Index.
• Whether sales are improving relative to active listings.
• How quickly comparable homes are selling.
• Repeated price reductions and relistings.
• Mortgage rates and financing conditions.
• Employment trends and buyer confidence.

For buyers: Evaluate the property based on its condition, comparable sales and your ability to afford it. Don't assume prices will fall further, but make sure your finances can withstand some market fluctuations.

For sellers: Price against today's competition and recent sales, not against what your property might have been worth at the peak of the market.

If you're planning to sell and buy another home, review both transactions together. A lower selling price can sometimes be offset by a lower purchase price, but the actual difference and all transaction costs matter.

My Final Thoughts: Will Toronto House Prices Fall in 2027?

Further declines are possible, especially in market segments where supply continues to exceed demand.

At the same time, some forecasts point toward modest improvements in the broader housing market as we move through 2027.

I don't believe buyers or sellers should make major financial decisions based solely on either prediction.

What matters is understanding your particular neighbourhood, property type, financial position and goals.

If you're considering a move, my approach is straightforward: let's review the recent sales, compare today's available properties and make a plan based on facts rather than speculation.

Information reviewed November 8, 2026. Historical GTA statistics and forecasts for Canada, the Toronto metropolitan area and GTA resale condominiums refer to different markets and measures. Forecasts are conditional estimates and may change. This article provides general real estate market information, not an appraisal or individualized mortgage, legal, tax or financial advice.