Toronto home sold at massive $900k loss as market remains "stuck"
Despite national home sales increasing earlier this summer following the Bank of Canada’s first interest rate cut since 2020, the bigger picture shows that Canada’s housing market appears to be mostly “stuck in a holding pattern,” according to the Canadian Real Estate Association’s (CREA) latest report.
As a result, many buyers have benefitted from increased choice in the market and better negotiating power on prices, leading many properties — including this Toronto home — to be sold well below their original price tags.
According to its listing, this four-bedroom, five-bathroom home in Toronto’s Bedford Park neighbourhood boasts over 4,200 square feet of living space, a heated driveway, high ceilings, a media room, a bar and a gym.
The property first sold for $6.8 million in January 2022, at a time when cheaper interest rates boosted demand in the GTA’s housing market and contributed to sky-high prices.
📢 “Utter decimation as Toronto Mansion sold for $900K Loss” 😮
📍Toronto, ON 🇨🇦
Bought in 2022 for a mind-blowing $6.8M. 💸
They would have paid a whopping $300k on Toronto land transfer tax alone. 💰
They sold it a few days ago for $5.9M, a whopping $1.2M ($900K + $300K)… pic.twitter.com/YST7D11gpJ
— Shazi (@ShaziGoalie) September 17, 2024
In August 2024, the home was put back on the market for $6.45 million and eventually sold for just over $5.9 million — representing a loss of nearly $900,000 compared to its price just two years earlier.
Plenty of other Ontario homes have sold well below their original prices this year, including a four-bedroom home in London that was sold at a loss of $650,000 following four attempts to sell, as well as a custom-built home in Oshawa that sold at a $800,000 loss.
“Despite some fledgling signs of life to kick off the long-awaited monetary policy easing cycle, Canadian housing market activity still looks to be stuck in the same holding pattern it’s been in all year,” said Shaun Cathcart, CREA’s senior economist in the association’s latest report.
“That said, with ever more friendly interest rates now all but guaranteed later this year and into 2025, it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well-behaved in most of the country.”
According to a Toronto Regional Real Estate Board (TRREB) report, home sales throughout the region were down year over year in August 2024, while new listings were up slightly over the same period.
“The Bank of Canada’s rate cut announced on September 4 will lead to a further improvement in affordability, especially for those using variable rate mortgages,” said TRREB President Jennifer Pearce.
“First-time buyers are especially sensitive to changes in borrowing costs. As mortgage rates continue to trend lower this year and next, we should experience an uptick in first-time buying activity, including in the condo market.”
GTA Realtors reported nearly 5,000 home sales through TRREB’s MLS System in August 2024, which was down by 5.3% when compared to the 5,251 sales reported in August 2023.
The average selling price was also down by a lesser 0.8% compared to August 2023, to $1,074,425.
“As borrowing costs trend lower over the next year-and-a-half, home buyers will initially benefit from both lower monthly mortgage payments and lower home prices,” said TRREB Chief Market Analyst Jason Mercer.
“Even as demand picks up, especially in 2025, it will take time for the inventory of listings to be absorbed. Ample choice in the market will help keep price growth moderate, at least in the initial phases of recovery.”