Ontario home sold at massive $800k loss a worrying window into current market

A home sold at a staggering $800,000 loss is just the latest example of a property in and around the GTA selling for much less than its original price tag. 

Located in Oshawa’s Eastdale neighbourhood, this four-plus-two-bedroom, six-bathroom home boasts a gourmet kitchen with a walkout to the deck, a main-floor office, a gas fireplace, a walk-in closet in the primary bedroom, and a finished basement with a sauna. 

The custom-built home was originally sold in March 2022 for $2.55 million — at a time when cheaper borrowing rates resulted in heightened demand throughout the province’s real estate market, which, in turn, drove prices up.

In April 2024, the home was put back on the market for $1.78 million but failed to attract any buyers. After its first failed attempt, the home was re-listed for $1.799 million and eventually sold for $1.75 million — exactly 800,000 less than it sold for just two years earlier. 

The home was reportedly listed as a power of sale, which differs from a regular home sale. The clause is usually written into a mortgage note that authorizes the mortgagee to sell their property in the event of default to repay the mortgage debt. 

As a result, the lender forces a sale on the public market and gets all the funds owed to them, while the current owner gets to keep any excess profit. In a foreclosure scenario, the lender usually takes ownership and gets to keep all the profits from the sale. 

This Oshawa home is hardly the first to sell well below its original price in 2024. A six-bedroom Brampton home sold at a significant loss of $600,000 in January, an 11-bedroom home in York University Village sold at a $400,000 loss in May, and a Cambridge home sold at a mind-boggling $825,000 loss in June after multiple failed attempts to sell. 

According to one of the Canadian Real Estate Association’s (CREA) latest reports, May was a “relatively uneventful month” for many Canadian housing markets as the national month-over-month home sales edged slightly lower. 

This meant that some prospective buyers benefitted from more wiggle room when negotiating lower prices. Home sales activity recorded over Canadian MLS Systems dipped 0.6 per cent between April and May 2024, remaining slightly below the average of the last 10 years. 

However, CREA’s Senior Economist Shaun Cathcart notes that this may be the last “sleepy month for housing activity” in Canada now that interest rates have moved lower.