February TRREB data reveals a market where supply is contracting three times faster than demand, the sales-to-new-listings ratio has inflected sharply upward, and month-over-month momentum is building quietly beneath year-over-year declines. A comprehensive data review for institutional and high-net-worth participants.
The February numbers are in, and they tell a more nuanced story than the headlines suggest. The Toronto Regional Real Estate Board reported 3,868 transactions in February 2026, a decline of 6.3 percent from the same month a year earlier. The composite average price settled at $1,008,968, down 7.1 percent year-over-year. For the casual observer, these figures confirm a narrative of continued weakness. For those reading the underlying structure, the picture is materially different.
Begin with supply. New listings in February totalled 10,705, a contraction of 17.7 percent from last year. Active inventory stands at 19,414, which remains elevated by historical standards but is no longer accelerating. The critical ratio here is the sales-to-new-listings ratio, which moved from 28.6 percent to 36.1 percent over the past two months. That shift matters. In market-cycle analysis, the SNLR is the earliest reliable indicator of a transition from buyer surplus to equilibrium. We are not in equilibrium yet, but the direction of travel has changed. Supply is contracting roughly three times faster than demand is declining, and that asymmetry is the structural story of this data release.
Days on market averaged 54, a figure that reflects the broader market but obscures significant variation by segment and geography. Months of supply sits at 5.0, down from the cycle peak. For context, a balanced market in the GTA historically corresponds to 3.5 to 4.5 months of supply, so we remain in buyer-favourable territory, but the gap is narrowing.
The month-over-month trajectory deserves particular attention. Sales rose 25.5 percent from January to February, and the average price increased 3.7 percent over the same period. Seasonal adjustment accounts for some of this, but not all. February typically outperforms January by 15 to 18 percent in a normal year. A 25.5 percent month-over-month gain suggests that activity is returning at a pace that exceeds seasonal norms. This is early-stage demand re-engagement, not a recovery, but it is the precondition for one.
Segment performance continues to diverge in ways that matter for portfolio allocation. Condominiums declined 12 percent year-over-year, reflecting persistent oversupply in the investor-heavy segments of the market. Semi-detached homes fell 9.2 percent, detached properties declined 3.9 percent, and townhouses posted the smallest decline at 2.4 percent. The gradient is instructive: the further a segment moves from investor-dominated supply toward end-user-driven demand, the more resilient its pricing has proven. This is not a new pattern, but it is intensifying.
The correction in historical context. From the February 2022 peak of $1,334,544 to the current $1,008,968, the composite average has declined 24.4 percent in nominal terms. In real terms, adjusting for cumulative inflation of approximately 12 percent over this period, the correction is closer to 33 percent. This is a significant repricing by any measure, and it has brought valuations to levels that, on a price-to-income basis, are more sustainable than anything observed since 2020. Whether this represents fair value or an overshoot depends on one's assumptions about the forward rate path and employment trajectory.
The risk profile is asymmetric but not uniformly bearish. The condo segment faces continued headwinds from investor liquidation, elevated completions, and rental market softness. For this segment, the path of least resistance remains downward in the near term, even as the broader market stabilizes. The freehold segments, by contrast, are showing early signs of supply-demand rebalancing, with months of supply declining and the SNLR improving at a faster rate than the composite figures suggest.
The months ahead will be determined by three variables: the employment trajectory in Ontario, the Bank of Canada's rate path, and the pace at which sidelined buyers re-enter the market. February's data suggests the third variable is beginning to move. Whether the first two cooperate remains the open question, and it is a question that demands caution alongside conviction.