The big melt

The great housing melt continues.

A crash in Canada was never in the cards. Never likely. Never happened. Never will. Real estate is too ingrained in the national psyche. It’s where most families have most of their net worth. It’s been coddled, supported and promoted by governments who tax it. And the property industry has done all it can to shame renters and lionize owners. Moral hazard abounds.

All that helped create a long-lived bubble, which a certain pathetic blog told you would eventually slowly deflate. Not fast. Slow. And long. And here we are.

There was stark new evidence from the country’s largest market in recent days that the melt has had a profound impact on affordability. Just as the average age of first-time buyers reaches the historic (and suspicious) height of 40, houses are getting cheaper and more attainable. Will the newbies see this as opportunity and rush back into real estate, or are we at a generational inflection point when renting (and being mortgage-free) is cool?

Here’s the latest from MPAC, the Ontario agency that tracks property values (which determines local taxes):

• Homes priced under $500,000 have jumped in number. Four years ago, only 17% of the market was priced at that level, now it’s 24%. That increase of seven points translates into a 40% surge in this segment.
• At the same time the share of homes listed for more than $1 million is shrinking. In 2022 it peaked at 35%, and is now 25%. That’s a reduction of almost a third.
• No surprise – condos are leading the price plop. Four years ago, just 24% were on the markets for less than $500,000. Now that has almost doubled, to 46% of all listings.
• In 2022 there were 105 towns and cities in Ontario with a median house price of $750,000 or more. Today that number has plunged to 65. That’s a reduction of 38%.
• Included on that list: Kitchener, Waterloo, Cambridge, Hamilton, Collingwood, Kawartha Lakes, Gravenhurst and Brock.

These are serious stats. In the lifetime of every Millennial there has not been another four-year period in which the market value of real estate fell this precipitously or relentlessly.

Just as important, look at the cost of financing. It also has melted.

In 2022, coming out of the pandemic, the Bank of Canada was fighting a surge in Covid-era inflation with serious rate hikes. The policy rate of a quarter of one percent hit 4.25% by the end of the year. Mortgage rates soared from the 2% range to 4.69% for fivers with a posted rate topping 7%. Variable mortgages cost more than 5%.

Today, big change. Five-year, fixed-rate home loans are available for slightly more than 4% and variables for less. The HST on new homes is gone. The assignment market is saturated with properties pre-con buyers are desperate to bail out of at deep, deep discounts. Anxious MLS sellers are willing to take offers conditional upon inspections, financing approvals or even the sale of an existing property. Owners have once again brought VTBs (vendor take-back mortgages) to life, making real estate debt even cheaper.

And competition in most markets and hoods has lessened dramatically. Few bidding wars or bully offers. Offer nights are a rarity, as are multiple bids and tone-deaf realtors blaring ‘SOLD OVER ASKING’ on their curbside signs.

In short, this is not 2022. It’s better. A vastly improved landscape for buyers – more choice, more listings, lower prices, cheaper loans. Is this not exactly what the moaners, whiners and bitchers were waiting for?

In April of 2022, a total of 8,008 properties were sold in the GTA. This April only 5,946 changed hands – a drop of 26%. Last month that climbed to 6,583, a decline of 10% from June of 2022.

Meanwhile inflation (while rising) is 3% now, compared to 7.7% this time four years ago. The central bank rate has come down by half since then. And in 2022 Justin Trudeau was the prime minister. Yeah, him.

If you can’t feel the bottom of this market yet, just stick out your toe. It’s there.

About the picture: “Gary here in hot and sunny Whistler BC, always been meaning to send an animal photo for the blog!” he writes. “A shot from off the deck with our four legged family member looking down at a nice healthy black bear yearling, note the perked up ears on the feline! (Felix and Dr. V will be purring!) As a passionate daily blog reader and limited steerage commentor under my anti-tech alias;  Luddite, Suzanne and I hope you are healing well from your incident, ironically Suzanne was visiting her 92 year old mom up on York road in NoTL when it transpired, so horrible of humans not being human!!! Thank you for all you do, in January when I was freaking out about transfering all of our portfolios from BMO-NB to TI have now become calm, cool, and collective seeing your team work their magic on the lumps, nicely done sir, thanks again as we continue forecasting our retirement journey with you, Doug, Ryan, Dakota, and team members!”

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

Source: https://www.greaterfool.ca/2026/06/28/the-big-melt/