This is one of the biggest questions facing Toronto homeowners today — especially young families in areas like Bayview Woods–Steeles, Thornhill, and Richmond Hill who bought between late 2021 and early 2022.
You bought at the top, prices dropped, rates rose — and now you’re wondering:
When will it make sense to sell this home and move into a bigger one?
Let’s break it down with data, market cycles, and a smart timing strategy used by investors and high-net-worth clients.
1️⃣ The Reality: Bought at the Peak, Now Sitting in the Middle
- Market Peak: February–March 2022
- Detached homes in Richmond Hill & Thornhill: ~$2.2M–$2.4M
- Townhomes: around $1.2M–$1.3M
- 2023–2024 Correction: Prices dropped roughly 15–25% (some areas up to 30%)
- As of Fall 2025:
- Average detached home in the GTA: ~$1.65M (still ~12–15% below peak)
- Inventory up, but sales volume is stable — a sign the market is forming a base
- Bank of Canada rate ~5%, projected to drop to 3.5–4% by mid-2026
📊 In short: we’re in the “bottoming-out” phase — not booming, but stabilizing.
2️⃣ The Key Concept: Focus on the Price Gap, Not Just Your Home Value
The real question isn’t “Did my home go up or down?”
It’s “How is the price gap between my current home and my target home changing?”
Let’s look at an example:
| Property Type | 2022 Peak | 2025 Value | 2026 Forecast |
|---|---|---|---|
| Your Townhouse | $1.2M | $1.0M (-16%) | $1.05M (+5%) |
| Target Detached | $2.0M | $1.65M (-17.5%) | $1.8M (+9%) |
| Price Gap | $800K | $650K | $750K |
💡 Interpretation:
Even though both prices fell, the gap between them shrank.
That means the cost to upgrade is temporarily lower — a rare opportunity.
✅ Smart move:
Sell and move up when the market begins to recover — before large homes fully rebound in price.
Once recovery is in full swing, detached homes will appreciate faster than townhomes, widening that gap again.
3️⃣ The Market Timeline: 2025–2028 Toronto Housing Cycle
| Year | Market Phase | Interest Rate Trend | Move-Up Strategy |
|---|---|---|---|
| Late 2025–Early 2026 | Bottoming out | Rate cuts expected but not yet deep | ✅ Prepare to sell: renovations, valuation, pre-approval |
| Mid–Late 2026 | Early recovery | Rates drop 1–1.5% | 🟢 Ideal move-up window — smallest price gap, lower borrowing cost |
| 2027 | Broad recovery | Rates stabilize | ⚠️ Price gap widening — move-up costs rising |
| 2028+ | Expansion / Boom | Demand strong again | ❌ Late cycle — higher prices, tougher competition |
4️⃣ How to Quantify Your Timing
Use this simple 3-step framework to evaluate your personal window:
Step 1: Calculate the Price Gap Ratio
Gap Ratio = (Target Home – Current Home) ÷ Current Home
✅ If this ratio is under 70%, you’re in a favorable upgrade window.
Step 2: Measure Rate Sensitivity
Every 1% drop in mortgage rates increases your buying power by roughly 8–10%.
Example:
If you can afford a $1.6M mortgage now,
a 1% rate drop means you can afford ~$1.75M —
enough to step into a larger property without needing a massive income jump.
Step 3: Layer in Lifestyle and Tax Efficiency
- Selling your primary residence to buy another primary residence remains capital gains tax–free.
- If you hold an investment property, calculate rental yield vs. opportunity cost.
- Factor in school zones, commute, and neighborhood transitions — those lifestyle variables can be as valuable as financial gains.
5️⃣ Tactical Game Plan for Homeowners Who Bought in 2022
| Timeline | Recommended Action |
|---|---|
| Q4 2025 | Order a home evaluation, discuss market prep with your agent, get mortgage pre-approval locked for 90 days |
| Q1–Q2 2026 | Get your home market-ready: light renovations, staging, photos, marketing prep |
| Q2–Q4 2026 | 🟢 Execute the move-up plan — list your current home, negotiate for a larger home while rates are falling and inventory still healthy |
| 2027+ | Focus shifts from upgrading to long-term wealth-building: rent, hold, or equity growth strategies |
💬 Bottom Line
The best time to “sell small and buy big” isn’t when the market peaks — it’s 6–12 months after the market bottoms, right as confidence returns and rates begin to fall.
For homeowners who bought at 2022’s peak:
Mid-to-late 2026 will likely be your best window to sell your current property and move up —
before prices of larger homes surge ahead again.
Thinking about moving UP – I’m here to help
Richard Wang 