In Ontario, selling at a loss becomes commonplace

Ontario home sellers are increasingly facing the reality of losses. Traditionally, only about two to four per cent of properties in Ontario sold for less than their purchase price. But by 2024, a staggering 25 per cent of homes bought in 2022 and later were sold at a loss—often hundreds of thousands lower than peak COVID-era prices. Across the province, the median loss was roughly $45,000. In the Greater Toronto Area, homeowners felt it more sharply, averaging around $56,000 in losses.

The trend reflects a dramatic shift since the housing frenzy of 2020–21. Back then, real estate prices spiked like never before. Yet recently, those who bought at peak prices have been hit hard. Some buyers even thought prices might keep climbing. Many people who purchased homes three years ago are now finding themselves forced to sell at a loss, something that used to be rare in the Canadian market.

One big reason for the losses is the rapid rise and fall of prices over a short time. Ontario saw a sudden influx of buyers during the pandemic, many seeking space outside cities. As demand surged, so did prices—overshooting what the market could sustain. Now, with interest rates higher and buyer demand subdued, prices have retreated. Many properties bought for $700,000 or more are reselling at 2017–2018 levels.

Notably, not everyone bought at the top. Condos and lower-priced homes have held up better. But for those who jumped in during the frenzy, especially at higher price points, it's a different story. People who bought one-bedroom condos for $700,000 or paid over $2 million for detached homes are now facing losses as they sell below what they paid.

Experts warn this isn’t a quick bounce-back situation. Some realtors describe the COVID surge as unsustainable and now see sellers struggling with the drop. Many have to accept a harsh new reality: the high prices they once expected are no longer guaranteed. For some, selling now means swallowing a large financial loss, with little chance of making that money back in the short term.

As a result, homeowners are changing strategies. Some are holding onto their homes longer, hoping to wait out the market dip. Others are renovating instead of moving, unable to accept financial loss. First-time buyers, especially older ones, are stepping carefully: many are choosing smaller, more affordable homes like condos over expensive detached houses. This wave of losses is a reminder that real estate markets can change quickly—and not always in your favor.