Down $200K on paper and frozen in place: Dave Steinfeld explains why staying in the Ontario market means your paper loss is largely offset by your next purchase discount, and why waiting for a recovery is often the costliest move.
I'm Down 15%+ On My Property. Now What?
I had a post-hockey discussion with someone that's been on my mind. This person (let's call him John) bought a Toronto condo near the peak of the market. He's down roughly $200,000 on paper. He's got a new kid, but wants to move to Whitby, something bigger, more space, different life. And he has completely frozen. Not because he can't move, but because he decided he isn't allowed to move until his condo recovers its value.
I asked him why. He didn't have a great answer.
The Paper Loss That Isn't Really a Loss
Here's what John was doing: treating an unrealized loss like a prison sentence. The condo is worth less than he paid. That's real. But he's not cashing out of the market. He's moving within it and that changes everything.
If his Toronto condo is down, so are Whitby townhouses. So are semis. So is basically everything in the GTA. The market didn't selectively punish his unit. It moved, more or less, in one direction. Which means if he sells at a discount, he also buys at a discount. The loss on one side of the trade and the gain on the other side largely offset.
The math on waiting only works if you believe the condo recovers faster than the Whitby property appreciates. That's a very specific bet. And it's one most people haven't actually thought through; they're just reacting to a number on a screen.
The Bank of Canada Rate Hike Made This Harder. That's Also Why It Creates an Opening.
The Bank of Canada raised its benchmark rate in a move that landed like a punch on a market already on its knees. Borrowing costs went up. Buyer purchasing power went down. And the housing market, which was already under pressure, took another hit.
That's the bad news. Here's what most people miss: the same force that's squeezing affordability is also clearing the competition out of the room. Buyers who were stretched in a hot market are now sidelined. Bidding wars are mostly gone. Conditional offers are back. Sellers are negotiating. That's a different buying environment than 2021, and not entirely a worse one if you're prepared.
John told me he couldn't afford a down payment in Whitby. Fair enough. But rental prices have also softened meaningfully in this environment. If he sold the condo, rented in Whitby for twelve months while he got pre-approved and stacked his down payment, he'd be in a far stronger position than he is now: sitting on a depreciating Toronto condo, paying carrying costs, and waiting for a recovery that the Bank of Canada has explicitly called "subdued."
The Upsizing Trap Sellers Keep Walking Into
The same logic applies on the seller side, in reverse. I hear this constantly: "I want to sell and upsize, but my place is worth less than it was. I'll wait for it to recover."
Here's the question that stops people cold: recover relative to what?
If your $900,000 semi in Mississauga dropped 15%, so did the $1.4 million home you're trying to buy. You're not selling into weakness and buying into strength. You're selling into weakness and buying into the same weakness. The spread, the gap you need to bridge, may actually be more manageable now than it was at the peak, when both prices were inflated and you were competing with eight other buyers for the larger property.
Timing the market so that your current home recovers before the target home recovers is a fantasy. It assumes two separate assets will move differently at exactly the moment you need them to. That almost never happens.
When Waiting Actually Makes Sense
I'm not telling everyone to move right now. There are legitimate reasons to stay put.
If you're selling to cash out entirely, say you're retiring and moving to a small town or out of province, then yes, the absolute price matters enormously. You're leaving the market, not trading within it. In that case, the discount on your home doesn't get offset by a discount on a purchase. It's a real loss in real dollars, and waiting for a partial recovery is a reasonable call.
If your carrying costs are manageable and you have no pressing need to move, there's no urgency to force a transaction in a cooling market. Rising construction costs, flagged by the Bank of Canada alongside the rate environment, mean the new-build alternative isn't dramatically cheaper than resale right now anyway. Patience without a hard deadline can be a legitimate strategy.
But if you're upsizing, rightsizing, or moving within the same market, waiting for a recovery is usually just anxiety wearing the costume of strategy.
What John Should Actually Do
When I laid it out for him, John went quiet for a minute. Then he asked whether he'd need a full down payment to get into Whitby, or whether there were options to bridge the gap while he got his feet under him.
That's when the conversation got useful. We talked about what selling the condo would net him after costs. We looked at what a year of renting in Whitby might actually cost versus his current carrying costs in Toronto. We talked about what he'd need to save to get to a reasonable down payment on a family home east of the city, and what that timeline actually looked like.
The picture wasn't perfect. But it was a lot cleaner than "wait indefinitely for the market to come back." If you're weighing a similar move and want to know what the bridge options look like in your specific situation, understanding how a bridge loan from a private lender works in Ontario is worth a conversation before you assume you're stuck.
His life had not been on hold because of the market. It had been on hold because of a number. And the number, once you actually do the math, didn't tell the story he thought it did.
The Bottom Line
The Bank of Canada's rate hike is real. The cooling market is real. The subdued outlook is real. None of that means you should freeze.
If you're staying in the market, moving within it, upsizing, rightsizing, or trading one GTA address for another, the paper loss on your current home is mostly offset by the paper discount on your next one. What actually determines your outcome is whether you've done the math or whether you've let an unrealized number make the decision for you.
John hadn't done the math. He'd just looked at the number and felt stuck. That's completely human. It's also not a strategy.
Know your actual position before you decide to wait. Sometimes the market timing that feels cautious is the most expensive move of all.
No pitch, no pressure. If you want to run the numbers on your situation, I'm at stonefieldcapital.ca or 416-371-2077.
David Steinfeld, Stonefield Capital, Richmond Hill
David Steinfeld
David Steinfeld is the Principal Broker at Stonefield Capital Inc., an FSRA-licensed private mortgage brokerage and lender serving Ontario brokers, investors, and borrowers since 2018.
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