In 2016, when I started my career as a candidate appraiser at Metrix Realty Group, Ontario's residential real estate market was predictable. Not boring — but predictable.
The market was coming out of a very stable pattern. Year-over-year increases that outpaced inflation, but not in a way that felt alarming. Properties weren't doubling in value every year. It was sustainable growth.
At that time, 99% of my work focused on residential appraisals for mortgage financing. The challenge was straightforward: keep comparables current to reflect steady market gains. The methodology was well-established. The patterns were reliable.
Then everything changed.
Since 2016, I've been constantly challenged to meet the demands of a market moving faster than our data could keep up. From month-over-month increases during COVID to sharp declines after 2022, staying realistic while keeping valuations current has been the defining challenge of my career.
Phase 1: The Acceleration (2016-2019)
Steady Gains Turn Aggressive
Characteristics: Accelerating appreciation, increasing buyer competition, supply constraints beginning to emerge
Key Driver: Low interest rates, strong employment, limited new construction
Between 2016 and early 2020, Ontario's residential real estate market began showing a new pattern: acceleration.
We started to see the increases become more significant. I was constantly battling to keep sales as current as possible to reflect the gains the market was seeing month over month.
Several factors converged during this period:
- Persistently low interest rates made borrowing cheap and accessible
- Under-supply of housing relative to population growth, particularly in desirable areas
- Over-demand from buyers with strong employment prospects and optimistic economic outlook
- Limited new construction due to regulatory challenges and land availability
For appraisers, this created a new challenge: How recent does a comparable need to be to remain valid? In a stable market, sales from six months ago are perfectly relevant. In an accelerating market, they're already outdated.
When the market is moving that quickly, you can't rely on comparables from 90 or 120 days ago. You need to understand the momentum and adjust your analysis accordingly.
Phase 2: The COVID Explosion (2020-Early 2022)
Historic Appreciation
Characteristics: Month-over-month double-digit appreciation, bidding wars, properties selling significantly over asking
Key Driver: Near-zero interest rates, pandemic housing demand, work-from-home flexibility
Then COVID-19 hit, and Ontario's real estate market didn't slow down — it exploded.
Interest rates essentially went as close to zero as we've seen them in my career. Combined with the pandemic shifting how people thought about housing, it fueled the market even more.
The Perfect Storm of Demand
Multiple factors created unprecedented demand:
- Rock-bottom interest rates made previously unaffordable properties suddenly within reach
- Work-from-home flexibility freed buyers from commute considerations, expanding their search areas
- Pandemic psychology drove demand for more space — home offices, yards, separation from urban density
- FOMO (Fear of Missing Out) became a legitimate market force as buyers watched prices rise week after week
- Record savings rates during lockdowns gave many buyers larger down payments
Between 2020 and early 2022, I witnessed something I'd never seen before: prices increasing not quarter over quarter or year over year, but month over month.
The Appraiser's Dilemma
During this period, appraisers faced an impossible challenge: How do you value a property when your most recent comparable sold 30 days ago for $650,000, but similar properties are now going for $700,000? Professional appraisers had to balance staying current with market momentum while avoiding over-optimistic valuations in what could potentially be an unsustainable boom.
The Peak: Early 2022
By early 2022, Ontario's residential real estate market hit its peak. Properties in markets like London, Guelph, and Windsor had seen cumulative appreciation of 40-60% in some neighbourhoods since 2019. Bidding wars were routine. Properties regularly sold for $50,000-$100,000 over asking price.
Looking back, it was clearly an anomalous time. But when you're in the middle of it, trying to provide realistic valuations while keeping up with rapid increases, you're constantly questioning: Is this sustainable? How long can this continue?
The answer came swiftly.
Phase 3: The Correction (Mid 2022-2023)
Rapid Decline
Characteristics: Sharp price decreases, extended market time, buyer hesitancy, listing price reductions
Key Driver: Aggressive interest rate increases, inflation concerns, affordability crisis
In March 2022, the Bank of Canada raised its overnight rate for the first time in years. It was the first of eight consecutive rate increases that would fundamentally reshape Ontario's real estate market.
The Government Steps In
Faced with runaway inflation — partially fueled by the overheated housing market — the Bank of Canada took decisive action. Interest rates that had been near 0.25% climbed rapidly:
- March 2022: 0.50%
- June 2022: 1.50%
- September 2022: 3.25%
- January 2023: 4.50%
For buyers, this translated to massive increases in monthly mortgage payments. A $500,000 mortgage at 2% costs roughly $2,100/month. At 5.5%, that same mortgage costs about $3,150/month — a 50% increase in carrying costs.
The Market Flips
After the market peaked in early 2022, we started noticing decreases. Our entire approach flipped. We were trying to be fair with our valuations while understanding we were now in a declining market.
The correction created new challenges for appraisers:
- Properties weren't selling at expected prices, making it difficult to find reliable comparables
- Sellers were still holding with expectations from peak pricing, listing properties that sat for months
- Values weren't materializing that reflected current conditions — sellers were in denial
- The lag effect meant it took time before sales data reflected the new reality
It took some time before we started to notice a consistent trend. We saw the impacts of increased financing rates bringing prices down to more sustainable levels — levels we'd seen prior to COVID.
How Far Did Prices Fall?
The correction varied significantly by market and property type, but many Ontario markets saw:
- Peak-to-trough declines of 20-30% in some suburban markets
- Properties returning to 2020 or early 2021 pricing levels
- Toronto and surrounding markets seeing 15-25% corrections
- Smaller markets like London and Guelph experiencing similar corrections
In effect, much of the COVID-era appreciation evaporated — though properties were still worth significantly more than they had been in 2019.
Phase 4: The Stagnation (2023-Present)
Market Stability with Ongoing Uncertainty
Characteristics: Flat month-to-month pricing, low transaction volumes, cautious buyers and sellers
Key Driver: High interest rates, economic uncertainty, affordability challenges
Since mid-2023, Ontario's residential real estate market has entered a period of relative stagnation — not quite recovery, not quite continued decline, but something in between.
Prices are kind of staying flat month over month. We're seeing things tick up marginally, tick down marginally. And more recently, we've seen things come down a little bit more again.
The Current Market Reality
Today's Ontario real estate market is characterized by:
- Limited transaction volume as both buyers and sellers wait for clarity
- Affordability challenges persist despite price corrections due to higher interest rates
- Regional variation with some markets showing resilience while others remain soft
- Economic uncertainty around inflation, interest rate direction, and employment stability
- Demographic pressure from immigration and population growth maintaining baseline demand
The Appraiser's Current Challenge
As appraisers, we're always working on data that's already transpired. But we try to consider the trend and give ourselves a realistic perspective on the market.
In a stagnant market, this means:
- Closely monitoring month-to-month changes for early signs of directional shifts
- Understanding that averages can mask significant variation by property type and neighbourhood
- Considering both supply factors (inventory levels) and demand factors (buyer activity, financing availability)
- Avoiding "crystal balling" the future while still providing forward-looking context
Key Lessons from Ontario's Rollercoaster Ride
1. Market Momentum Matters More Than Historical Averages
Traditional appraisal approaches rely heavily on historical comparables. But when markets move rapidly — up or down — understanding momentum becomes critical. Where is the market headed? What are buyers actually willing to pay today, not 60 days ago?
2. External Economic Factors Drive Local Real Estate Markets
Interest rates, inflation policy, employment trends, and even global pandemics shape local real estate values more than many property owners realise. A beautiful home in a desirable neighbourhood is still subject to broader economic forces.
3. Sustainable Growth Matters More Than Peak Prices
The COVID boom created impressive paper gains for homeowners, but those gains proved fragile. Sustainable, predictable growth — while less exciting — provides more reliable long-term value appreciation.
4. Professional Valuation Expertise Is Critical During Volatility
During stable markets, property valuation can feel straightforward. During volatile periods, professional expertise becomes essential. Understanding whether you're in an accelerating, declining, or stagnating market significantly impacts decision-making.
Without crystal balling the future, our job is to give ourselves and our clients a realistic perspective on the market and the properties we're appraising. That means understanding both the data and the context behind the data.
What's Next for Ontario Real Estate?
Professional appraisers don't predict the future — we analyse current conditions based on evidence. Here's my perspective:
We're seeing some softening recently. Whether that represents a new trend or just normal seasonal variation remains to be seen. What we do know is that interest rates remain high by recent historical standards, affordability remains challenging, and buyer sentiment remains cautious.
Several factors will likely shape Ontario's real estate market in the coming months and years:
- Interest rate direction: Will rates come down meaningfully? Stay elevated? Move higher?
- Supply additions: New construction has been limited. Will increased supply ease pressure?
- Immigration and population growth: Continued demographic pressure supports baseline demand
- Economic health: Employment trends, recession risks, and wage growth all matter
- Regulatory changes: Government housing policy can shift market dynamics quickly
For property owners, the lesson from 2016-2024 is clear: real estate markets cycle. Understanding where you are in the cycle — and making decisions based on professional analysis rather than emotion or speculation — matters enormously.
The Professional Advantage
Over the past eight years, I've valued thousands of properties across Ontario, through boom times, bust times, and everything in between. That experience provides something invaluable: perspective.
Every market is different. Every neighbourhood is different. Every property is different. Our job is to dive into the specifics while understanding the broader context. That's what professional appraisal brings to the table.
Whether you're selling, refinancing, estate planning, or making investment decisions, that perspective — grounded in current market evidence and informed by years of navigating volatility — is what separates guesswork from informed decision-making.
