Toronto Homeowners Face Heavy Losses as Property Prices Reverse

Toronto’s housing market is confronting a sharp reversal from the extraordinary price gains seen during the pandemic, leaving many homeowners who purchased between 2021 and 2023 facing significant losses when they sell.

Data compiled by real estate platform HouseSigma shows that 80.2% of Toronto-area homes purchased three to five years earlier and resold between January and July 2026 fetched less than their previous purchase price. The median loss among those properties was about $130,000, equivalent to 13.54%.

The figures mark a dramatic departure from conditions seen during most of the previous decade. Between 2016 and 2024, fewer than 4% of comparable properties sold for less than their earlier purchase price.

The share rose to 34.6% in 2025, before jumping to more than 80% during the first seven months of 2026.

Pandemic-era gains have sharply reversed

The contrast with 2022 is particularly significant. During the first seven months of that year, 99.79% of comparable Toronto-area properties sold for more than their previous purchase price.

The median gain was approximately $365,000, or nearly 61%, representing the strongest median dollar increase recorded during the 11-year period examined.

By comparison, only 19.21% of comparable homes resold in 2026 generated a gain. For those properties, the median increase was around $89,694, or 8.2%.

Homeowners who purchased at the peak of the pandemic-era market have been hit especially hard.

Among 989 properties bought in 2022 and resold through July 2026, 820 — or 82.9% — sold below their previous purchase price. The median loss was approximately $175,000, or 16.92%.

Condos face the biggest pressure

Although Toronto’s condominium market has received much of the attention, losses are now appearing across different types of residential properties.

HouseSigma data shows that condos remain the most affected segment. Of homes purchased between 2021 and 2023 and resold in 2026, the proportion selling below the original purchase price was:

• Condos: 87.53%
• Townhomes: 81.34%
• Semi-detached homes: 75.07%
• Detached homes: 72.03%

Individual transactions illustrate the scale of the correction.

A semi-detached property on Conarty Crescent in Whitby that changed hands for $1.29 million in February 2022 was sold for approximately $875,000 in July 2026, representing a $415,000 decline.

A townhouse in Milton purchased for $1.125 million in January 2022 later sold for about $767,000, resulting in a loss of roughly $358,100.

At the luxury end of the market, a detached property in Toronto’s Forest Hill neighbourhood purchased for $5.5 million in April 2022 was sold for approximately $4.05 million in May 2026 — a reduction of $1.45 million.

Selling below purchase price does not always mean negative equity

A lower selling price does not automatically mean that a homeowner cannot repay their mortgage.

Mortgage broker Phil Edwards said homeowners who accumulated sufficient equity may still be able to clear their outstanding mortgage even if their property sells for less than what they originally paid.

For some owners, the alternative is simply to remain in the property.

Real estate agents say homeowners who bought during the market peak are increasingly choosing renovations instead of selling. For freehold property owners, the prospect of realizing a large loss — combined with land transfer taxes and other costs associated with purchasing another home — can make moving less attractive.

Renovation activity has consequently become more visible in some Toronto-area neighbourhoods.

Some homeowners have little choice but to sell

Not every homeowner can wait for prices to recover.

One Vaughan homeowner represented by realtor Tim Yew had purchased a 1,776-square-foot detached house for $1.27 million in March 2021. After accepting a job in the United States, the owner needed to relocate and eventually put the property on the market.

The house was initially listed for $1.33 million in July 2026, before the asking price was reduced to just below $1.3 million. It ultimately sold in August for approximately $1.265 million, around $5,000 below the original purchase price.

However, once approximately $80,000 in renovations and upgrades and other transaction expenses were considered, the homeowner's overall loss was estimated at roughly $175,000.

Another homeowner experienced a larger loss after a family death required an unexpected sale.

The owner had purchased a 955-square-foot Toronto condo for about $900,000 in cash in August 2022. The property eventually sold for approximately $700,000 in December 2025, a $200,000 decline in the property's sale price.

After accounting for additional costs, the total loss was estimated at around $270,000.

Homeowners face a difficult decision

HouseSigma’s calculations do not include expenses such as land transfer taxes, real estate commissions, legal fees, renovations and other transaction-related costs. As a result, the actual financial loss for some sellers can be substantially greater than the headline difference between their purchase and sale prices.

For homeowners considering a sale, real estate professionals say the first issue to determine is whether selling is necessary at all.

Owners who have enough financial flexibility may choose to hold their properties and wait for market conditions to improve. However, those facing relocation, financial pressure or other unexpected circumstances may not have that option.

Another challenge is the gap between sellers' expectations and what buyers are currently willing to pay.

Some homeowners who bought properties between 2021 and 2023 continue to list them at or above their original purchase prices in an effort to avoid taking a loss.

But today's buyers are generally focused on recent comparable sales and current market conditions rather than the price a seller paid several years ago.

The result is a difficult new reality for Toronto homeowners who purchased near the market's peak: the price they paid in the past may have little influence on what their property is worth today.