Is There a ‘Bad’ Real Estate Market in Toronto? What History Shows

There is no official “bad market” in Toronto real estate. Housing markets are described as buyer’s markets, seller’s markets or balanced markets, and each one is good for some people and hard for others. What people call a bad market is usually a buyer’s market seen from a seller’s point of view, or a seller’s market seen from a buyer’s. Decades of GTA sales data show that the real risk is not the market itself but being forced to buy or sell at the wrong moment.

Is there such a thing as a bad real estate market?

Not in the way the term is usually used. Industry groups such as the Toronto Regional Real Estate Board (TRREB) and the Canadian Real Estate Association (CREA) describe conditions with measurable numbers, like the sales-to-new-listings ratio and months of inventory, and those numbers place a market in one of three zones:

• Buyer’s market: more homes than buyers, so buyers have leverage.
• Seller’s market: more buyers than homes, so sellers have leverage.
• Balanced market: roughly even, so neither side has a big edge.

Every one of those zones creates winners. A slow market that feels terrible to someone listing their home is the same market that gives a young family its first real chance to negotiate. A red-hot market that feels impossible to buyers is a windfall for long-time owners who are downsizing.

So why does a market feel bad?

A market feels bad when it works against what you need to do right now. That usually comes down to a few situations:

• You have to sell quickly in a buyer’s market, because of a job move, separation, estate or financial pressure.
• You bought near a peak with a small down payment and prices have since fallen, leaving little equity.
• Your mortgage renews at a much higher rate than the one you started with, squeezing your monthly budget.
• You need to buy in a seller’s market and keep losing on offer night.

Notice that none of these is about the market alone. They are about timing, debt and flexibility. Owners with time on their side can usually wait out a soft patch. Buyers with patience and a solid pre-approval can usually find opportunities in a hot one.

What Toronto’s history shows

The GTA has gone through genuine downturns, and they are worth knowing about. These figures are TRREB’s average selling prices. TRREB notes that its market area and data have changed over the years, so long-term comparisons are approximate.

Period	What happened to the GTA average price
1989 to 1996	The annual average fell from $273,698 to $198,317, about 27.5%. It did not pass the 1989 level again until 2002 ($277,375).
2017 to 2018	The annual average fell from $823,422 to $784,118, about 4.8%, after a spring 2017 peak and new provincial housing measures.
2022 to 2025	The annual average fell from $1,193,766 to $1,067,707, about 10.6%, as interest rates rose sharply.
Feb. 2022 to Oct. 2026	The monthly average went from $1,334,544 to $1,024,108, about 23% lower.

The early 1990s are the closest thing Toronto has had to a truly “bad” market for owners. Prices fell for years and recovery took more than a decade. Yet sales were much higher in 1996 (58,564) than at the 1989 peak (38,960), as lower prices drew buyers back. The same period that hurt people who bought at the top created some of the best buying opportunities of the last 40 years.

The pattern repeats: downturns come, they can be painful, and they eventually give way to recovery as the region keeps growing. That does not guarantee the timing or size of the next rebound, but it is why many long-term owners talk about time in the market rather than timing the market.

Who wins and who struggles in each market

Market	Usually good for	Usually hard for
Buyer’s market	First-time buyers, move-up buyers who sell and buy together, investors with cash	Owners who must sell quickly, recent buyers with little equity
Seller’s market	Long-time owners, downsizers, estates selling a property	First-time buyers, anyone who needs conditions to protect their deposit
Balanced market	Most people, since terms are fair on both sides	Sellers who overprice, buyers expecting deep discounts

How to make any market work for you

• Plan to stay a while. The longer you own, the less any single year’s prices matter.
• Buy what you can carry. Stress-test your budget at a higher rate so a renewal does not force your hand.
• Keep a cushion. Savings give you the freedom to wait instead of selling into a weak month.
• Use sold data, not headlines. Your street and home type can behave very differently from the GTA average.
• Buy and sell in the same market when you can. If prices are soft when you sell, they are usually soft when you buy too.

Frequently asked questions

Is Toronto real estate in a bad market right now?

Not by the industry’s definitions. As of TRREB’s October 2026 figures, the GTA was a buyer-leaning, close-to-balanced market, with prices below their 2022 levels and buyers holding more negotiating power. See our latest GTA market update for the full numbers.

Will the Toronto housing market crash?

Nobody can predict that reliably. Prices have already fallen meaningfully from their 2022 high, and TRREB points to continued population growth and new supply measures over the medium term. The bigger risk for most households is taking on a payment they cannot comfortably carry.

Is a slow market a bad time to sell?

It depends on what you do next. If you are buying another home in the same market, a lower sale price is often offset by a lower purchase price. Sellers who have to cash out entirely, or must sell on a deadline, feel a slow market the most.

How long did Toronto take to recover from the 1989 housing crash?

Based on TRREB’s annual averages, the GTA’s average price peaked in 1989, bottomed in 1996 and did not pass its 1989 level again until 2002, about 13 years later.

Is a buyer’s market bad for homeowners?

Only if they need to sell soon or are short on equity. Homeowners who are staying put are mostly affected on paper, and many use a buyer’s market to move up, since the next home is easier to negotiate on as well.

See where your market really stands

Headlines describe averages. Your decision depends on real homes. Check the sold feed to see what bungalows are actually selling for, read the Toronto bungalow market report, and browse bungalows for sale across Ontario. One of our preferred realtors who are bungalow experts can help you decide whether this market works for your plans.

This article is general information as of November 2026, not legal, tax, investment or mortgage advice. Market conditions change monthly, so confirm the details for your situation with a licensed professional.