Becoming a homeowner is unfortunately a far-fetched reality for many Ontario residents, but those who luckily managed to secure their dream homes in 2022 may now suddenly be regretting their decision.
According to a study by real estate marketplace, Point2, a grim reality has set in for many recent homeowners as their properties are losing value, including single-family homes in 18 large cities and condos in 26 markets across Canada.
“Homeowners across the country are feeling the sting of their homes losing value and are contemplating a distressing reality: their hard-bought homes are currently worth less than one year ago,” the report reads.
The study, which observed year-over-year changes in home prices in 67 cities across Canada, reveals that Ontario’s largest cities single-handedly led this price decline trend for both single-family and condo homeowners, with buyers in Burlington regretting their decision the most.
Single-family homeowners in Burlington who bought their homes at the end of 2022 lost $163 every day for a year in 2023, which means that their homes are currently worth nearly $60,000 less than what they were originally sold for.
Although this figure represents the worst-case scenario, single-family owners in three more Ontario cities also went backwards in terms of home value.
Homeowners in Kitchener, Mississauga, and Markham also lost $109, $114, and $154 per day in 2023, totaling a loss of $39,850, $41,740, and $56,043 per year, respectively.
“Percentage-wise, the decreases in home prices in these cities might seem benign, coming close to a meager five per cent. But, that percentage drop translates to a more hard-hitting net amount, especially considering the tough market conditions during which these owners took the plunge,” the study reads.
“Last year showed that a real estate investment can sometimes backfire. This means Canada’s newest owners from these unlucky cities might have to wait more than others to build wealth.”
When it comes to condos, the study found that new owners in Mississauga were hit the hardest, with their newly acquired homes losing $36,600 in value, essentially depreciating by $100 on a daily basis.
“Condo owners seem to be faring worse than single-family homeowners. With 26 markets seeing year-over-year price drops for condos, the price correction for this segment is even more generalized. What is considered the more affordable housing option got progressively cheaper, putting condo owners’ equity hopes on standby,” the report continues.
“However, given that real estate is a long-term investment, it’s possible that condo owners are just looking at a longer timeframe for building equity. And, for the time being, they could focus on their other amazing win: The security and joy of being a homeowner are priceless.”
Royal LePage Terrequity Realty, Brokerage