Toronto-area homeowners are coming to terms with new reality: selling at a loss

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Photo by Richard Lautens/Toronto Star via Getty ImagesToronto realtor Sammy Kohn recalls what it was like representing buyers during the housing frenzy of 2021 and early 2022.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountIt was not uncommon, he said, to be on the way to a property only to get a call from the listing agent saying it had already sold.“I would quite literally be so frantic to get to showings,” he said. “That’s not sustainable.”Four years later, some of the buyers who prevailed in that market are finding out just how costly a reversal can be.Eight in 10 Toronto-area homes that were purchased in the last three to five years and resold in the first seven months of 2026 changed hands for less than their owners originally paid, according to data prepared by real estate listing website HouseSigma. The median loss was $130,000, or 13.54 per cent.SUBSCRIBER EXCLUSIVE: FP West: Energy Insider brings you behind the oilpatch’s closed doors with exclusive insights from insiders every Wednesday morning.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of FP West: Energy Insider will soon be in your inbox.We encountered an issue signing you up. Please try againThat’s dramatically different from what similarly situated sellers experienced over most of the past decade.HouseSigma compared Toronto-area homes resold in the first seven months (January to July) of each year from 2016 to 2026 after being held for three to five years. In the years 2016 through 2024, less than four per cent sold below their previous purchase price. The share jumped to 34.6 per cent in 2025 and climbed to 80.2 per cent this year.The reversal from 2022 is particularly stark. In the first seven months of that year, 99.79 per cent of homes matching that criteria fetched more than their previous purchase price. The median gain was $365,000, or nearly 61 per cent –– the largest median dollar gain in the 11-year period.This year, just 19.21 per cent of comparable resales have sold for more than their previous purchase price. Among those that did, the median gain was $89,694 or 8.2 per cent.For those who bought in 2022 and listed their homes this year, the picture is even more striking. Of the 989 properties purchased in 2022 and resold through July, 820, or 82.9 per cent, went for less than their previous purchase price. The median loss was $175,000 or 16.92 per cent. No other purchase year had a higher share of loss-making resales or deeper median percentage losses.Kohn said exceptionally low borrowing costs, limited inventory and fierce competition among buyers propelled the market four years ago. Prices have since corrected, but some sellers remain anchored to what they paid under very different conditions.“Those conversations require realism and a lot of empathy,” Kohn said. “It’s very difficult for an owner to accept that this market, if they bought in 2021 through 2023, will likely not support the price they paid.”Much of the discussion around selling at a loss has centred on the struggling condo market, but HouseSigma’s data shows the losses extend across housing types.A semi-detached home on Conarty Cres. in Whitby purchased for $1.29 million in February 2022 sold for $875,000 in July, a $415,000 loss. A Milton townhouse purchased for $1.125 million in January 2022 sold for $767,000 in July, a decline of $358,100.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.At the higher end, a detached home on Elmsthorpe Ave. in Toronto’s tony Forest Hill neighbourhood purchased for $5.5 million in April 2022 sold for $4.05 million in May –– $1.45 million below the previous purchase price.Nevertheless, condos remain the hardest hit. Among condos purchased between 2021 and 2023 and resold this year, 87.53 per cent sold below their previous purchase price, compared to 81.34 per cent of townhomes, 75.07 per cent of semi-detached and 72.03 per cent of detached properties.Selling at a loss does not necessarily mean a homeowner is underwater on the mortgage.Cannect mortgage broker Phil Edwards said an owner who has built enough equity may still be able to repay the outstanding mortgage in full despite selling for less than they originally paid.Some homeowners are finding another way to avoid taking the loss: staying put.Realtor Jeff Carr of REMAX City Teams/East End Homes in Toronto said many of the freehold owners he hears from who bought at the height of the market are renovating and holding instead –– particularly once they consider the potential loss on a sale and the land transfer tax they would pay on another property.“This summer and last, there were a lot more signs for renovation companies on front lawns than for sale signs,” Carr said.For would-be sellers who can continue carrying their property instead of listing, waiting leaves open the possibility its value will recover.“You haven’t realized the loss until you actually sell the property,” Edwards said.Still, not everyone has that choice.One of realtor Tim Yew’s clients sold his Vaughan home after accepting a job in the United States and relocating. Yew, an agent with REMAX Ultimate Realty Inc. in Toronto, said his client had purchased the 1,776-square-foot detached home for $1.27 million in March 2021.Yew listed the property for $1.33 million in July before reducing the price to just under $1.3 million later that month. It sold in August for $1.265 million, $5,000 less than the owner had paid five years earlier.While the difference may be negligible compared to some losses, it captured only a fraction of the homeowner’s financial costs. Yew said his client had spent about $80,000 renovating and upgrading the property and estimated that once those expenses and the transaction fees were factored in, he lost about $175,000.Fortunately, the client had enough equity in the property to repay the mortgage and complete the sale.HouseSigma’s figures do not account for land transfer taxes, commissions, legal fees, renovations or other transaction costs.Another client of Yew’s took a much bigger hit after an unexpected death in the family forced her to sell her uptown Toronto property. She had paid about $900,000 in cash for the 955-square-foot condo in August 2022 and sold it for $700,000 in December 2025, a $200,000 decline. Yew estimated her overall loss at about $270,000 once all costs were included.“She was really under the gun,” Yew said. “She had no choice but to sell.”The property was on the market for several months, with few showings, he said. One deal fell through when the prospective buyer was unable to secure financing. Eventually the seller accepted the loss and moved into a rental.For homeowners weighing whether to list in this market, Kohn said the first question is a simple one: “Do you really need to sell?”Realtor Scott Ingram of Century 21 Regal Realty Inc. in Toronto said he still sees sellers who bought between 2021 and 2023 list their homes above their original purchase price because they believe they should at least break even.But buyers are making decisions based on current comparable sales, not what an owner paid several years ago.“The market doesn’t care how much you paid for your house back whenever,” Ingram said. “The market cares what it’s worth today.”We apologize, but this video has failed to load.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. 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