Posted On Mar 13, 2025

The Greater Toronto Area (GTA) real estate market has always been a bit of a rollercoaster, but lately, the twists and turns have become even more unpredictable. Between fluctuating interest rates, affordability concerns, and now economic uncertainties linked to U.S.-Canada trade tensions, deciding whether to sell your home before buying a new one has never been more crucial.

The Current GTA Market: A Shifting Landscape

For years, GTA real estate was a red-hot seller’s market, with bidding wars and skyrocketing prices. However, things are starting to change.

What’s happening now?

  • More Homes on the Market: There’s been an uptick in listings, meaning buyers now have more choices. This translates into increased competition for sellers.

  • Moderating Prices: According to the Toronto Regional Real Estate Board (TRREB), while prices remain high, they’re not increasing at the rapid pace we saw a few years ago. Some property types are even experiencing slight price declines.

  • Longer Selling Times: Homes are taking longer to sell, requiring sellers to be more patient and strategic.

The Bigger Economic Picture: Tariffs, Jobs, and Real Estate

On top of real estate market shifts, broader economic factors are also at play. Recent tariff disputes between Canada and the U.S. are raising concerns about economic stability. Trade tensions can lead to job losses in key industries, reduced consumer confidence, and overall economic slowdown—factors that can directly impact housing demand.

For instance, industries such as manufacturing and agriculture, which rely heavily on U.S. trade, could face layoffs, making potential buyers more hesitant to commit to big purchases like a home. If job stability declines, the real estate market could soften further. This makes it even more important to play it safe when making real estate decisions.

Why Selling First is the Smarter Move

Given these conditions, selling your home before buying another puts you in a stronger financial and negotiating position. Here’s why:

  1. Know Exactly What You Can Afford
    Selling first means you’ll have a clear budget when looking for your next home. With real estate prices fluctuating, assuming you’ll get a certain price for your current home can be risky.

  2. Stronger Buying Power
    When you sell first, you become a more attractive buyer. Sellers prefer buyers who don’t have a home sale contingency because it reduces the risk of a deal falling through. This gives you more leverage in negotiations.

  3. Avoid the Double Mortgage Trap
    If you buy first and your current home takes longer to sell, you could be stuck carrying two mortgages—a situation that can quickly become financially overwhelming. With interest rates still relatively high, this can be a costly mistake.

  4. Prevent Forced Selling at a Loss
    If your home doesn’t sell quickly and you need to offload it to cover your new purchase, you might have to drop the price significantly. Selling first eliminates this pressure.

The Downsides of Buying First: A Risky Gamble

If you decide to buy first, you’re taking on some serious financial risks:

  • Carrying Two Mortgages: Most lenders won’t approve you for a second mortgage unless you have significant income and assets. Even if you qualify, handling two mortgage payments can be stressful.

  • Market Uncertainty: With economic instability, housing prices could decline, meaning you might end up selling your current home for less than expected.

  • Increased Stress: Managing two properties, financing, and uncertain timelines can turn your dream move into a nightmare.

Addressing the “Inconvenience” of Selling First

Some homeowners hesitate to sell first because they worry about temporary housing or storage issues. While this is a valid concern, there are ways to make the transition smoother:

  • Negotiate Closing Dates: A skilled real estate agent can help align the closing dates of your sale and purchase.

  • Short-Term Rental Options: Renting for a few months might be less stressful than carrying two mortgages.

  • Live with Family:  It is more common than you think for young families to move back home with parents while between real estate transactions.  Grandparents often have larger homes that they raised their own children in (so space likely won’t be a problem) - and they will love the opportunity to spend time with their grandchildren

  • Storage Solutions: If you need to bridge the gap between selling and moving, storage units can be a great temporary fix.

The Bottom Line

In today’s unpredictable market—where economic concerns, rising inventory, and price moderation are in play—selling first offers financial security and peace of mind. While buying first might seem like a smoother transition, the financial risks far outweigh the minor inconvenience of temporary housing solutions.

Key Takeaways: ✅ The GTA market is shifting, with more listings and slower price growth. ✅ Economic factors like U.S.-Canada trade tensions could impact job stability and real estate trends. ✅ Selling first gives you financial clarity, stronger negotiation power, and eliminates the risk of carrying two mortgages. ✅ The perceived downsides of selling first can be managed with strategic planning.

Before making a move, consult with a real estate professional and Mortgage Agent to assess your options. Navigating the GTA market takes strategy—make sure you’re on the right side of the deal!

 

 

Let's connect!

Ready to discuss your home ownership goals and a Better Mortgage by Dom?

«