As buyers continued to benefit from increased choice in the GTA marketplace last month, many sellers were forced to knock thousands of dollars — or in some cases, hundreds of thousands of dollars — off their properties just to finalize a sale.  

One recent example involves a four-bedroom, three-bathroom townhouse in Brampton, which originally sold for $1.25 million in March 2022, when cheaper borrowing rates contributed to heightened demand throughout the region's real estate market. 

The home was re-listed in April 2024 for $1.1 million, but was put back on the market again as a power of sale in August. The home was sold for $875,000, representing a loss of $376,000 when compared to its price just two years earlier. 

A power of sale differs from a regular home sale, and is a clause written into a mortgage note that authorizes the mortgagee to sell their property in the event of default to repay the mortgage debt. 

📢 Brampton Blowout💥

📍Brampton, ON 🇨🇦

$376K loss on a "Power of Sale."

Bought in 2022, for almost $200k over the asking price, the new owners of this Brampton townhouse get into trouble. 😰

Fast forward two years, the lender takes over and puts it up for sale.

It sold for… pic.twitter.com/2AlIcOEbqs

— Shazi (@ShaziGoalie) August 15, 2024

Under these circumstances, the lender forces a sale and gets all the funds owed to them, while the current owner gets to keep any excess profit. 

Many other GTA properties have sold well below their original prices this summer, including an Oakville townhouse that sold at a significant $316,000 loss in July, and a three-bedroom home in Toronto's Silverthorn neighbourhood that sold at a loss of $207,500 in June. 

According to the Toronto Regional Real Estate Board's (TRREB) latest market report, a better-supplied market in the GTA throughout July meant that buyers benefited from a "slight relief" in selling prices on average. 

The report found that the average selling price of $1,106,617 was down by 0.9 per cent over the July 2023 result of $1,116,950. Despite this, home sales in July 2024 were up compared to the same time last year. 

"It was encouraging to see an uptick in July sales relative to last year. We may be starting to see a positive impact from the two Bank of Canada rate cuts announced in June and July," said TRREB President Jennifer Pearce.

"Additionally, the cost of borrowing is anticipated to decline further in the coming months. Expect sales to accelerate as buyers benefit from lower monthly mortgage payments."

As more and more buyers take advantage of affordable mortgage payments in the months ahead, TRREB Chief Market Analyst Jason Mercer says that they will benefit from the significant build-up in inventory. 

"This will initially keep home prices relatively flat," Mercer explained. 

"However, as inventory is absorbed, market conditions will tighten in the absence of a large-scale increase in home completions, ultimately leading to a resumption of price growth."