When upgrades collide with a down market

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Buyers will still go for the more expensive home if it is set up with the right kind of renos

As house prices continue to dip across the Greater Toronto Area, those who invested in major renovations hoping for a strong return are debating whether to cut their losses or hold tight for better times.

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While some neighbourhoods have seen sharp declines since the 2022 peak, experts say price trends vary — and with smart strategy, there’s still opportunity for savvy sellers.

Since Canada’s real estate market peaked, the median price of a single-family home in 10 neighbourhoods across the GTA fell by 40% over the last three years, according to the latest research from Canadian real estate technology company Wahi.

Of the 344 neighbourhoods analyzed, 289 showed lower prices this year compared to April 2022, with sections of Brampton and Toronto leading the pack.

Ryan McLaughlin, an economist with Wahi, points to a marked shift away from luxury homes towards lower-cost products due to higher interest rates and cross-border tariffs contributing to economic uncertainty.

“We also have a weak labor market at the moment in the GTA and incomes are a huge driver of demand for housing,” he says. “Prices have adjusted and if a seller still has a 2022 amount stuck in their heads, they might have to adjust.”

On the flip side, he advises sellers not to panic as demand for housing products tends to fluctuate. “If you can weather things out, that product may bounce back.”

For those “motivated” sellers there is always opportunity, say Jenny Simon and Shane Little from Sage Real Estate based in Toronto.

With 25 years’ combined experience, the duo say they have “frank conversations” early on about realistic price points and renos that make the biggest impact. Case in point, a recent listing in Toronto’s east end sold for 137% of asking in one day. “Pricing played a factor, as did the strategic transformations by our team and curated staging designed with a potential buyer in mind,” says Little.

In this current market, Simon says buyers will still go for the more expensive home if it is set up with the right kind of renos. “There is still excitement when a house looks and even smells perfect.. and it needs to stand out among the hundreds of listings people are swiping through,” she says.

For sellers moving up, there is also advantage on the buying side. “You may not be getting 2022 prices on your sale but you’re buying a way better house then you could have afforded before,” says Little.

Further good news is the fact that there are several GTA pockets where prices have rebounded near or above April 2022 levels due to limited supply and consistent demand, according to Wahi’s research.

Meanwhile, even with house prices expected to dip 2% this year, CMHC’s Summer 2025 housing Market Outlook predicts a gradual recovery in the market in 2026 as trade tensions ease and consumer confidence builds.

McLauglin says homeowners have to remember that the long-term trend of Canadian real estate is ultimately a positive story. “It’s reasonable to expect that that will continue although it’s just hard to say exactly when.”