The bounce

When a buck-ninety-nine house in a trendy Toronto hood sold for a million over ask the other day, we wondered. Did we just bounce off the bottom?

Earlier this week this pathetic blog wandered into Vancouver, Victoria, Edmonton and Calgary to take the temperature of things. Not hot. Definitely not cold. And apparently warming. Prices are still soggy, sales levels are stabilizing and detached properties seem to be the canaries in the coal mine. Undead.

After valuations have sunk more or less steadily for over three years, and with properties priced at least 20% below post-pandemic levels (and up to a third in many areas), plus with lower mortgage costs, conditional offers being accepted and less competition – are buyers being lured back?

Maybe. In godless T.O. it’s sure looking that way.

The April stats arrived yesterday, and they tell a tale. The doomers won’t like it.

• Across this massive region of more than six million people, sales jumped 7% year/year and a similar amount from March. This was the best showing in almost a year.
• In Toronto itself, the gain was more profound. A 9% swelling in deals.
• Big news in the condo space, too, with a similar 9% spurt in sales activity. As an industry publication noted, “Condo sales in the GTA have plunged in recent years amid a severe mismatch between available inventory and buyer demand, after consecutive years of high completion rates.”
• April was the second consecutive month of annual sales gains, while at the same time total inventory has dropped back down to the 25,000 level. Tightening market conditions.
• While off from 2025, prices appear to be stabilizing. The benchmark barely budged month-over-month, ending a streak of 10 straight declines.
• Sales are up the most in nine months and affordability is back to 2020 levels.

Source: Toronto Regional Real Estate Board, MLS

The data nerds at HouseSigma note the typical detached buyer in the GTA last month paid about 3% less than the asking price. That’s interesting since the median detached listing was $1,200,000 – down from $1,279,900 a year earlier. So, buyers just got a 3% discount on a property that the vendor was asking 6% less for.

“With less daylight between asking prices and what buyers were prepared to pay, more transactions found a place to close. This is likely a key reason why detached sales rose.”

Eureka! When houses cost less, more people can afford them. Sales go up. And as sales rise, available inventory is absorbed, tightening market conditions – which can lead to demand exceeding supply. When that happens, the price declines end. The bottom is hit. Bing-a-boom. We’re done.

So do these conditions now exist?

Look at the data. Make up your own mind. But if you’ve been sitting on your hands waiting for a 50% price haircut, dream on. Once this Iran ‘skirmish’ (Trump’s new word for it) is over with energy costs and anxiety falling – and financial markets already in party mode – things could look much different.

Meanwhile HouseSigma makes one other interesting point. While the condo market poses better value for first-timers (especially assignments) than at any time since we were all wearing masks, these days it’s the upsizers who are scoring the most. “With sale and listing prices lower across the board, the buyer may lose some dollars in the sale of their smaller home, but will gain more with deeper discounts on the larger home they are buying. Under these conditions, it makes much more sense to upsize to a house, than to downsize from a house to a condo.”

What do then realtors say?

No surprise. Buy. Yeah, they always say that, but this time more people seem to be listening. “We still have a substantial amount of pent-up demand in the marketplace,” they say in this week’s report. “More certainty on the trade front and an easing in geopolitical tensions would result in further improvements in market activity.”

As mentioned yesterday, this week has seen a big chop in bond yields. Canada’s benchmark five-year debt took a dive yesterday while equity markets romped higher. Mr. Market truly expects the Middle East war to dribble to a conclusion, with a slicing of energy costs and a drop in the threat of more inflation.

It may be hopium. And there could be more months of weak or falling house prices – perhaps another 5%. Equally possible is that this correction, which now roughly matches the last Big One (in the early 1990s), is done. Kaput.

We won’t know until, of course, it’s too late.

About the picture: “I saw your call for the members of Canine Nation to push back against the creep of cat photos in your blog,” writes Malcolm. “Here is a recent photo of our family dog, Teddy, looking quite proud in his new harness during a recent hike in the forests of North Vancouver. As a young(ish) reader – and one of the ones entering, as you say, my ‘first serious financial crisis’   – I really appreciate your clear and level-headed advice on such a wide variety of topics!”

To be in touch or send a picture of your beast, email to ‘garth@gartth.ca’.

Source: https://www.greaterfool.ca/2026/05/07/the-bounce-2/