A Faster Start Than Expected
Both Fox and Liang noted that January activity has surprised them. After a very quiet Q3 and Q4 2025, they expected a slower pace in the New Year. Instead, they described a noticeable jump in showings, buyer engagement, and sentiment, especially compared to the end of Q4.
Liang’s has long advised sellers not to wait until March to list their properties, because buyers tend to appear first. New-year momentum is real as people talk over the holidays, make plans, and start the New Year off with reinvigorated enthusiasm. Sellers often follow later, which can shape the Spring market in a way many homeowners underestimate.
Fox echoed the point from a “Boots on the Ground” perspective as the Fox Marin team noted that across the board, the first half of January was unexpectedly busy, which could be an early indicator that transaction volume may have already bottomed in 2025.
Transactions Will Recover Before Prices Do:
Real estate professionals experience the market through transactions, not price. Fox and Liang repeatedly returned to the idea that 2026 might be a year when sales improve, even if pricing remains under pressure.
The GTA finished 2025 with around 62,000 transactions, a level they described as extremely low in historical context, not seen since the early 2000’s. Their base case for 2026 is higher, with both floating a range around 70,000 to 75,000 transactions, with a possibility of pushing higher if current momentum holds.
Why Sentiment Might Be Turning, Even In The Face Of Negative Headlines
A major theme of the episode was how sentiment gets shaped in Toronto. Both Fox and Liang acknowledged that negative stories drive clicks, and when it comes to housing, those narratives can become self-reinforcing, given how emotional residential real estate can be. The two went on to discuss how negative and almost toxic media environment has become. Everything in life is a pendulum, and at some point, the consensus negative narrative will begin to swing back in the other direction.
The news cycle moves faster than ever, and many buyers and sellers are increasingly looking for long-form, boots-on-the-ground information and expert opinions rather than negatively sensationalized headlines optimized for clicks. Fox pointed to the broader shift toward podcasts and YouTube as search engines for real-life decisions, especially among younger audiences who are increasingly distrustful of legacy media.
Rates: Market Behaviour will be less driven by rate announcements and will be more focused on sentiment.
The discussion around interest rates was interesting because market dynamics are far more complex than the traditional view of “rates down = prices up.”
Liang raised a point many Toronto buyers are thinking and feeling right now: after the variable-rate pain of the past few years, more people are leaning toward fixed-rate stability, even if it means upfront costs and lower borrowing power. Fox acknowledged that, in many of their client scenarios, interest rate sensitivity is muted because down payments are often well above 20 percent, as money flows from he boomer generation to their children.
So what moves the needle? Rate cuts can change psychology and sentiment, driving many potential buyers off the sidelines if buyers start to believe the worst is behind them.
The Condo Market: Quietly Improving Value
One of the most notable parts of the conversation was how both are becoming cautiously optimistic about condos, after years of falling prices.
Liang described seeing buying opportunities in well-located resale condos, which make a lot of sense on a replacement-cost basis, with some condo opportunities starting to see cash flow-positive scenarios, something that hasn’t been seen in the market for a long time.
Fox added that 2026 is expected to be a peak year for condo inventory completion, after which the pipeline could slow dramatically. When supply falls off and, in tandem with future population growth, we get closer to 2030, condos will be poised for a significant comeback.
Entry-Level Freehold Depends On The Condo Ladder.
Liang noted that the entry-level freehold market often depends on condo owners moving up from their first purchase. If the condo market is sluggish, move-up demand is delayed, which can soften certain pockets of the entry-level low-rise market.
The implication is not that freehold is “bad.” It is that the market’s internal gears still matter. In a slower environment, the spread between selling and buying can also create opportunity, especially for move-up buyers who can sell strategically and buy into a softer segment.
A Down Market Changes What Buyers Can Demand
Fox summed up a shift many Toronto buyers are feeling. In a hot market, people buy what they can. In a softer market, they can buy what they actually like.
That means parking start to matter again. Noise starts to matter again. Awkward layouts get punished. Buyers become pickier and less forgiving. That can make outcomes look “unpredictable,” even within the same neighbourhood or building, because the market is no longer lifting all boats equally.
For sellers, this is why presentation, pricing strategy, and realistic expectations matter more than ever. A great property can still do very well. A compromised one can sit.
Practical Advice They Agreed On:
The episode closed with advice that was consistent and not tied to hype.
FOR BUYERS:
- It is often easier to negotiate when fear is high than when optimism returns.
- Focus less on the sticker price and more on value: condition, long-term suitability, and what the home enables in real life.
- If it is a five-year-plus decision, short-term volatility matters less than people think.
FOR SELLERS:
- Sell first, buy second, unless you have deep pockets and genuine flexibility.
- Expect the process to be emotionally and logistically harder than “the boom” years.
- Choose a representation you trust enough to have hard conversations with quickly, because speed and clarity matter in a selective market.
2026 Outlook: Cautious Stabilization
If there was one shared conclusion, it was this: 2026 may not be a “price rebound” year, but it could be a “stabilization” year.
They floated a scenario in which transactions improve meaningfully from 2025’s lows, while prices drift modestly downward overall, perhaps in the low single digits. They also discussed the possibility that the first real year-over-year price growth may not arrive until 2028, with different timelines by segment, low-rise leading and condos following, depending on inventory and demand.
That kind of forecast is not about certainty. It is about preparing for what a transitional year often looks like: more movement, more selective outcomes, and a market that slowly returns to functioning normally.
Key Takeaways
- Early January 2026 activity has been stronger than expected in some segments.
- Transaction volume may recover before pricing does.
- Condos are starting to look more compelling in terms of value in certain pockets, especially resale.
- Buyers are pickier, and property quality is separating outcomes more sharply.
- Strategy matters more than sentiment, especially for sellers.
A Market That Is Finding Its Footing Again.
The defining shift in early 2026 is not a price rebound, but a return to decision-making.
After years of rate shock and suppressed activity, the Toronto real estate market is beginning to function more normally. Buyers are re-engaging, sellers are adjusting expectations, and transactions are happening for practical, life-driven reasons rather than speculation or fear.
Prices may remain soft, and outcomes will continue to vary sharply by property and location. But stabilization in transaction volume is meaningful. It suggests that confidence is slowly rebuilding, not because conditions are perfect, but because people are choosing to move forward anyway.
This is often how market transitions begin. Quietly, unevenly, and without headlines. Early 2026 feels less like a turning point and more like a reset, one where value, realism, and execution matter more than sentiment.
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This article was written by Kori Marin, a Toronto Broker & Managing Partner at Fox Marin Associates. For high-energy real estate aficionado Kori Marin, a well-lived life is achieved by maintaining an “all-in” attitude that realizes every last ounce of one’s full potential. This mindset has driven successful results in every aspect of her life – from her corporate sales and account management experience to her international travels to her years of fitness training and leadership – and is the hallmark of the exceptional work that she does on behalf of her clients in the residential real estate sector in downtown Toronto.
