Published 7 September 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty
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Get My Free Estimate →Because the two markets have different sellers. The broad market contains people who have to transact — job moves, growing families, expiring mortgages, investors carrying negative cash flow. The luxury market contains almost nobody who has to. When conditions get uncertain, ordinary sellers still list and accept the market’s answer, while luxury owners simply do not list.
That is why, in 2026, the GTA average price fell 2.7% year over year and the MLS Home Price Index fell 4.5%, while sales above $5 million were 62 versus 63 the year before. The top end did not hold up because it is stronger. It held up because fewer transactions happened at all, and the ones that did were not distressed.
The two numbers that look like a contradiction
In August 2026, TRREB reported a Greater Toronto Area average selling price of $993,410, down 2.7% year over year, with the MLS Home Price Index composite benchmark down 4.5%. Read alone, that is a market drifting downward.
In the same year, RE/MAX counted 62 sales above $5 million in the GTA from January to April, against 63 in the same months of 2025. Essentially unchanged. And within the City of Toronto, the $5 million to $7.499 million band was actually up 5.4%, at 39 homes against 37.
These are not contradictory numbers. They are measurements of two different economies.
The mechanism: who has to sell
Almost every difference between the broad market and the top end traces back to one variable — the proportion of sellers who have no choice.
| Broad market | Luxury market | |
|---|---|---|
| Typical seller motivation | Job change, family size, mortgage renewal, investor cash flow | Lifestyle, downsizing, estate, relocation — rarely urgent |
| Response to uncertainty | List anyway and accept the market’s answer | Withdraw and wait |
| What falls first in a soft year | Price | Transaction count |
| Buyer pool size | Thousands at any moment | Often a dozen or two per band, per area |
| Comparable sales available | Many, recent, close | Few, older, imperfect |
| Effect of a rate change | Direct, on affordability | Indirect, on sentiment and alternatives |
Supply is the real story of 2026
The most under-read line in TRREB’s August 2026 release is this one: new listings were down 14.1% year over year while sales were down only 2.1%. Supply left the market roughly seven times faster than demand did. Active listings finished the month at a lower level than a year earlier, and TRREB itself framed the release around tightening inventory.
That pattern is even sharper at the top. A 17% drop in $3 million-plus sales — 300 against 361 — is very largely a listings story. Owners of $4 million houses read the same headlines everyone else does, decide this is not their year, and renovate instead.
The condo split makes the point in miniature
Nowhere is the divergence clearer than in condominiums. In the first quarter of 2026:
- The GTHA recorded zero new condominium project launches — the first quarter in thirty years with none.
- New condo sales came to 246 units, down 52% year over year and 94% below the ten-year average.
- Completed but unsold inventory hit a record 4,295 units, with 8,629 more unsold units still under construction.
- New construction averaged $1,189 per square foot against $859 in resale — a record 38% gap.
And in the same window, $3 million-plus condominium sales in the Toronto core were flat year over year, and $5 million-plus core condo sales doubled from two to four, one above $10 million.
A 600 square foot investor unit in a 2019 tower and a full-floor residence in the core are both “Toronto condos.” They have nothing else in common. Anyone who owns one and reads statistics about the other will make a bad decision.
Sample size: the trap in every luxury headline
The luxury bands are small enough that ordinary randomness produces dramatic percentages. Sixty-two sales versus sixty-three is a difference of one house. Four condominium sales versus two is a 100% increase that represents two apartments. Neither tells you anything about value.
The practical takeaway
Stop reading regional averages as if they describe your property. If you own or are buying above $3 million, the only statistics that matter are the active listing count in your band and neighbourhood, the days on market of the properties that actually sold, and how far off asking they closed. Three or four data points that genuinely resemble your house are worth more than any headline about the GTA.
What would actually change the top end
Two structural levers are worth watching rather than predicting. The federal prohibition on residential purchases by non-Canadians is currently set to expire on 1 January 2027. And the City of Toronto raised its municipal land transfer tax on homes above $3 million on 1 April 2026, adding roughly $18,500 at a $5 million purchase and $68,500 at $10 million. One of those loosens demand; the other taxes it. Which dominates is not something anyone can honestly forecast — but they are the two things to watch.
Frequently asked questions
Why did Toronto’s average price fall while luxury sales stayed flat?
Volume and price are different measurements. The GTA average selling price of $993,410 in August 2026 was down 2.7% year over year and reflects the whole market, dominated by condominiums and mid-market houses. The luxury figure — 62 sales above $5 million in the first four months of 2026 against 63 a year earlier — is a count of transactions, not a price index. Neither number contradicts the other.
Are luxury homes recession-proof?
No. They are less liquid, not less risky. In a downturn the top end typically sees transaction volume fall much harder than prices, because owners withdraw rather than accept a lower number. That looks like stability until you actually need to sell, at which point the thin buyer pool works against you.
Do interest rates affect the luxury market?
Yes, but through a different channel. Fewer top-end buyers are stretched by a mortgage payment, so rate changes hit sentiment, the cost of holding development or investment property, and the returns on the alternatives to real estate, rather than affordability directly.
Why do new listings matter more than sales?
Because supply is what actually sets the tone. In August 2026, GTA new listings fell 14.1% year over year while sales fell only 2.1%. Supply was leaving faster than demand — which is the mechanism behind inventory tightening even in a year when the average price was down.
Is the condo market part of the luxury market?
Only partly. In Q1 2026 the GTHA recorded zero new condominium project launches and a record 4,295 completed but unsold units, while $5 million-plus condominium sales in the Toronto core doubled from two to four. The investor condo market and the core luxury condo market are separate economies.
What should I actually watch to judge the luxury market?
Three things: the number of active listings in your specific price band and neighbourhood, how long the ones that sold took, and how far below asking they closed. Regional averages tell you about a market you are not in.
Thinking about buying or selling at the top end?
Send me the address, or the shortlist you are considering. I will tell you what the property is actually worth today, what the land is worth without the house, what the transfer tax and carrying costs will be, and whether the deal makes sense. Confidential, always.
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Related reading
- Toronto luxury real estate in 2026: what the numbers actually say
- How many $3 million homes actually sell in Toronto each year?
- Your Toronto condo is worth less than you paid. What to do about it
- Should I sell my house in 2026? An honest read of the GTA market
Sources
Everything above that is a rule, a rate or a published number comes from these. Verify anything that matters to your own deal.
- Toronto Regional Real Estate Board — Market Watch, August 2026
- RE/MAX Canada — 2026 Spotlight on Luxury Real Estate, Greater Toronto
- Real Estate Magazine — No new condo projects launched in Q1 2026 (Urbanation data)
About the author — Jatin Dua, Broker of Record
I’m the Broker of Record at RE/MAX Quantum Realty, 799 The Queensway in Etobicoke, and I work with buyers, sellers and investors across Toronto and the west GTA. A large part of my work sits in the upper end of the market, where the comparables are thin, the rules are heavier and the cost of a wrong number is measured in hundreds of thousands of dollars.
The free estimators on this site are mine. I built them because the first question every owner asks is “what is it worth?” and the honest answer starts with a number you can check yourself. connect@jatindua.com or 437-987-1925.