Toronto Bank Sales, a Downtown Vancouver Presale Loss, and Rate Hikes on the Way

Written in October 2026. Some details have changed since, so check current numbers before you act on this.

Big losses on recent Canadian home sales are a warning for overextended owners and an opportunity for buyers who are ready, especially with the Bank of Canada under real pressure to raise rates. A multi-unit home in Toronto just went as a bank sale for far below its February 2022 price, and a luxury presale condo in downtown Vancouver just sold for far less than its buyer paid, before you even add the GST.

On this week's Coast to Coast Canadian Real Estate podcast, my co-host Mike Carpino brought two Toronto-area bank sales, I brought a downtown Vancouver presale loss, and then we got into what TD and UBS are saying about prices and rates. This is my take on all of it, from the Vancouver side.

How does a Toronto home lose so much value so fast?

Mike opened with the biggest percentage loss either of us has covered. It's a multi-unit house in Toronto that sold in February 2022. That's as peak as the Toronto market got. Mike says the final straw for the peak out there was the first week of March that year.

It just sold again, four years later, for far less. I'm not printing the prices here, but you can look up sold homes in your own area on the sold map (free account) with a free account.

The house itself was set up as three units, with a basement suite, a ground floor unit and an upper unit, each with its own kitchen and two bedrooms apiece, so six bedrooms in total. In 2022 it was staged and somebody got into a bidding war for it. Today the photos show the same house, empty, missing appliances and in rough shape. You'd be gutting the kitchen and taking a lot of it down to the studs.

And of course it was a bank sale, sold as is, where is. When you lose that much, there's no equity left to survive it, and the bank ends up taking the property over.

I'd say our best guess at how it got there is a story we've seen a lot. At the peak, rents were strong and three tenants under one roof looked like it would pay the mortgage off like crazy. Then prices dropped, rents dropped, and the income stopped covering the payments. Mike pointed out how many people in Ontario refinanced their own homes during that run to buy an investment property, or to give their kids a down payment, and that money has now evaporated or pushed people into foreclosure.

One more thing that house shows: a little staging and a good cleaner do a lot for the appearance of a property. I push all my clients toward staging. It's not inexpensive, it's an investment, but there's a lot of data showing you can get more and sell a lot quicker.

Why did a downtown Vancouver presale lose so much?

My example came from a follower who asked me to cover it, and it's a big one: a presale in a luxury building downtown.

It was bought around the peak for presales, it took years to close, and it sold recently for far less.

Add the GST on the original purchase and the loss gets bigger again. And that's before the strata fees they've paid along the way, the commission to get out and inflation on top.

The seller fought hard before finally accepting an offer.

I mean, I think one of the issues was the floor plan. Layout counts on a high-end unit, and buyers at that level notice a kitchen that doesn't suit the home.

I'd say there's a very happy buyer on the other side of this one. If you're looking at the downtown market, and specifically at higher-end presales that closed between 2016 and 2020, you're seeing a lot of these big losses right now. If you want to see homes like that as they come up, the motivated sellers list tracks properties that have been sitting and cutting.

Why chasing the price down can backfire

Mike made a point about price-drop ladders that I agree with. When a seller drops the price every 30 days, buyers notice. Some of them look at the history and think, "Cool, in 30 days it'll be less," and they keep waiting. It turns into a game of chicken.

In luxury, that game is even harder on the seller, because the buyer pool is so small. Mike says the number of people who can buy luxury product in Ontario is shrinking by the month, and foreign investment, which was a big part of luxury buying, is gone.

That's why I'm so focused on getting the price right at launch. If you're thinking about selling, the seller blueprint lays out how we price and launch so you're not stuck on that ladder, and you can start with a home value estimate built from what's selling near you.

Have some empathy for the people taking these losses

You know, we see this in the comments a lot. A lot of people figure that if you bought a property like this, you probably own several and it's a drop in the bucket. But you don't know anybody's situation. I doubt the owner of that Toronto house has millions sitting in the bank, and the person in that downtown unit was probably trying to grow a real estate portfolio and got caught.

Mike put it well. A lot of the time it's a mom-and-pop investor trying to improve their family's financial position, the same way somebody buys a stock they believe in. They made the decision, nobody forced them, and you win some and you lose some. But real estate is different from a stock in one important way. When a stock goes to zero, it goes to zero. With a mortgage, a property can go below what you owe, and then the bank chases you for the difference and your credit gets wrecked. Because you borrowed against the whole property value, your loss can be bigger than the money you put in.

What does a bank sale in Brampton teach a buyer?

Mike had one more, another bank sale, which is the common theme right now. A bank sold a vacant house in Brampton.

It has one kitchen and an unfinished basement with a separate entrance and nice high ceilings, so no suite income. It was bought just after the 2022 peak, and a big piece of that price was gone in a very short time.

Mike walked through the layout and wasn't a fan. There's wasted space at the entry, a small single-door closet, popcorn ceilings and builder-basic lighting on a fairly new home, a builder-basic kitchen, and a small backyard on a shallow lot that dips off toward what's likely a city drain. The houses are so tight together the roofs are almost touching. He also mentioned that Brampton has a reputation right now for high car and home insurance and for crime in the news, though it doesn't rank near the top when you look at actual crime statistics.

From a Vancouver lens, at what it sold for, I'd jump on that house. I like the exterior, it's a lot more unique than what we usually see, and there's nothing wrong with the interior, it's just dated. A good value purchase lets you put your own stamp on it, and the unfinished basement can become a games room or media room. The one thing that would stop me is the lot. For a family that wants a yard for the kids, it's a little bit too small.

Mike added a local nuance. In parts of Brampton, backyards often go unused, and people spend more time in the front yard. When the backyard does get used, it's often to dig down and build a lower stairway into the basement for a second suite.

What is TD forecasting for Canadian home sales and prices?

TD Bank cut its outlook for Canada's housing market as borrowing costs climb. Canadian Mortgage Professional reported in September 2026 that TD's September 2026 outlook projects national home sales falling 5.3% this year, with average prices up 0.1% at year end before rising 1.7% in 2027.

I think TD is still being optimistic. I could see the market dropping another 5% by the end of the year rather than flatlining. Mike and I have said for a long time that 2027 and 2028 are going to be flat years, so flat pricing is more of a next-year story than a this-year one. And any real rise in 2027 always seemed like a stretch to me.

Is the Bank of Canada about to raise rates?

Canadian Mortgage Professional reported in October 2026 that UBS is calling for a Bank of Canada rate hike in October and projecting inflation of 3.3% when Statistics Canada reports the September numbers. Mike says the futures markets were leaning toward an increase at the October 28 announcement, and those odds tend to be right more often than not. Brown Brothers Harriman said on October 20, 2026 that swaps were pricing a 78% chance of a 25 basis point hike at that announcement, up from 60%.

I don't know exactly what they'll do, but I don't think the Bank can go too far, because a lot of people are still feeling a ton of pain in this economy. If it moves, I expect a quarter point at a time.

The quick math I use: every quarter point, up or down, is about $15 a month for every $100,000 you borrow. On a $1 million mortgage, that's about $150 a month extra on a single quarter-point hike. Do that four or five times and you're looking at $700 to $750 more a month, which is substantial. For my own situation, I have two variable-rate mortgages on investments, so I'll feel some of that, but my primary is locked in at 3.55%, which I'm very happy with.

If you want to see what a quarter point or a full point does to your own payment, run it through the mortgage calculator.

The Bank of Canada doesn't set fixed rates

This one's important. The Bank of Canada's policy rate drives variable rates. It has nothing directly to do with fixed rates, which are a completely separate thing. Fixed rates were sitting in the low 4s a little while ago, they're around 4.3% now, and they've been climbing. I expect them to keep getting pushed up as well. I covered the latest fixed-rate jump in more detail in Fixed Mortgage Rates Just Jumped 20 Basis Points.

If you're going variable, look for a lender with a good discount off prime. Either way, talk to your REALTOR® and a mortgage broker about which direction makes sense for you before you commit.

What higher rates mean for buyers and sellers

Rates going up will push people in both directions. Some buyers who were on the fence will disappear, and sellers will have an even smaller buyer pool. Some of those sellers will have to take lowball offers, or decide whether to turn down the one offer they get in their first 60 days on the market.

Buyers right now are super skittish. A rate hike either scares them out completely or convinces them prices will drop more, so January turns into June, and June turns into September. But the losses we cover every week are the opportunities you're giving up by sitting on the sidelines. There are very, very good buys out there right now that let you insulate yourself with a strong purchase. If you're not actively looking and ready to go, you miss them.

It also comes back to why you're buying. If it's a home for your family, it's probably not worth trying to squeeze out another $50,000 or $75,000 by waiting, because that discount is likely already built into the price. And things can change quickly. If there's a resolution with Iran or on tariffs, the rate hikes may not happen, rates could come back down, and you'd be wishing you'd bought before Christmas.

Get pre-approved and hold a rate now

Mike's advice, and I agree with it: if you're in the market, get your pre-approval done now and get a rate hold. If fixed rates keep rising, you've locked in today's rate. If they fall, you can still take the lower one. If you end up buying the deal of your life, you won't be paying an extra quarter point you didn't have to.

The buyer blueprint lays out the steps from pre-approval to keys if you want a plan before you start looking.