The Silent Rebound: Why 2026 is the Year of Market Fluidity, Not Price Peaks

Transactions, Not Prices, Mark the True Bottom

The most common analytical error is waiting for prices to spike before declaring a recovery. In professional circles, a market "bottoms" when fluidity returns. The context for our current state is staggering: in 2025, the Greater Toronto Area (GTA) saw a 25-year low of just 62,000 transactions. To put that in perspective, the population of the GTA has nearly doubled since the year 2000. We weren't just in a "slow" market; we were in a frozen one.

But early 2026 is telling a different story. Properties that sat dormant for six months are suddenly seeing action. This "capitulation"—where sellers finally price to the reality of the day—is a vital sign of health. As fluidity returns, the probability of a sale rises, creating the momentum necessary for a new cycle to begin.

The "Desensitization" Effect on Market Sentiment

For years, the market was paralyzed by "shock and awe" headlines. Whether it was the Bank of Canada's aggressive hikes or global "black swan" events, buyers would freeze. Today, the news cycle moves so fast that the "fear factor" has lost its edge.

We have entered an era where geopolitical chaos is barely a 24-hour blip. People are becoming desensitized to the chaos. The prevailing sentiment has shifted from "waiting for the world to stop turning" to "I need to get on with my life." Human milestones—marriages, expanding families, and the need for more space—are finally outweighing the exhaustion of the news cycle.

The "European Model" and the End of the Ownership Dream

Beneath the stabilization lies a sobering shift in Toronto's social fabric. We are transitioning toward a "European model"—a K-shaped economy where the divide between asset owners and non-asset owners becomes permanent. Wealth is increasingly concentrated in institutional hands, REITs, and the "Bank of Mom and Dad."

This isn't just theory; we are seeing it in cities like New York, where "voting riots" have installed leaders who view property ownership itself as an outdated privilege to be dismantled.

The Surprising Case for the Resale Condo Market

The media loves to conflate the "pre-construction apocalypse" with the broader condo market. While developers are indeed struggling with stalled starts, the resale market is emerging as a massive value play. In many pockets of Toronto, resale condos are trading at roughly $800 per square foot—a price that is significantly below current replacement costs.

Furthermore, because new construction starts have effectively flatlined, the supply tap will be turned off for the next decade. For first-time buyers, the current "shadow inventory" of owners wanting to move up to freehold homes creates a unique window. Early 2026 has already seen multiple offers on one-bedroom and one-bedroom-plus-den units, signaling that savvy buyers are ignoring the headlines and looking at the math.

Strategy Over Timing: The New Rules of Engagement

Trying to time the absolute price floor is a gambler's errand. In this market, there is a distinct privilege in being an advisor because real value—true strategy—is only visible when the tide is out. Success in 2026 requires a disciplined approach to the "new normal":

Conclusion: Moving Forward in the Pendulum Swing

The Toronto real estate market is a pendulum that has been pushed to a negative extreme. We have survived the fastest interest rate hikes in history, unprecedented policy shifts, and a global pandemic. The fact that the market has remained this resilient is a testament to real estate as a fundamental human need.