As condo prices tumble in Canada's biggest cities, appraisers face steep challenges judging what homes are really worth
Home prices have been on the wane across many Canadian cities amid a wider market slowdown in recent years – and that’s creating plenty of challenges for appraisers, particularly in the Toronto and Vancouver condo sectors.
While prices soared in those spaces as demand surged during the 2010s and early this decade, scores of investors are now finding the pre-construction condo they bought is worth less when closing comes around than it was when they first agreed to buy it.
That’s partly because of oversupply and partly because demand is plunging thanks to higher interest rates, lower immigration, and generally cooler clamour for rental properties.
And Terry Dowle (pictured top), president of the Appraisal Institute of Canada, told Canadian Mortgage Professional that the uneven landscape is making appraisers’ work even more difficult.
“The condo market is an extremely challenging space to be doing valuations,” he said. “Using a sale from a year ago is of absolutely no use in the condo market because the values could be 20% different in certain market segments.
“So you really need a current supply. Barring that, appraisers can look at listings to determine the general market trends, but the listings are all over the place now. It’s a really difficult market space.”
The meltdown has created inconsistent and unreliable data, a big impediment to appraisers who partly rely on price trends to judge how much a property is worth.
“Appraisers need quality data and sufficient quantities of data to reveal the market value for a property,” Dowle said. “We don’t determine market value – we examine markets and trends to reveal the market.
“There has to be a lot of [good data] to really come down to understanding the trends in the market. It’s problematic for us, especially in areas where there’s a lack of consistency in things like listing prices and buyer expectations.”
Toronto’s condo market continues its downward spiral. TRREB’s Jason Mercer reports a 10.6% price drop in the 905 region, with sales and affordability still under pressure.https://t.co/kXPh2RSxpU
— Canadian Mortgage Professional Magazine (@CMPmagazine) September 4, 2025
Instability creates further headwinds for appraisers
Many buyers are currently in a holding pattern across the country in anticipation of prices and interest rates moving even lower, attempting to gauge when the bottom of the market will arrive.
Meanwhile, predictability is ebbing out of the market when it comes to what sellers expect to get for their homes. “There’s no consistency in list prices. It’s become sort of like throwing a dart at a dartboard,” Dowle said.
“This instability creates challenges for appraisers to accurately determine value and trends. And I don’t see it getting any better.”
‘You really should be engaging with an appraiser’
Mortgage brokers and their clients understand all too well the risks of a valuation coming in lower than the agreed price, often leading to a frantic scramble to make up the difference – or even legal troubles if the buyer attempts to forfeit the deposit and walk away from the deal.
Dowle said the market’s current unpredictability means it’s essential to work with appraisers as early as possible in the process to understand the landscape and what can affect property valuations.
“I would encourage anybody that’s thinking about listing their property or trying to get a transaction in that [condo] space to rely on your realtor, rely on your broker, but you really should be engaging with an appraiser,” he said. “They’re going to understand the historical trends and they’ll be able to dig in and see what the expectations are today without any emotion.
“Appraisers are independent. We don’t have any vested interest in the deal. A mortgage broker wants to get the deal done. A realtor wants to get the deal done. They have commissions on the base. Appraisers aren’t like that – we’re completely independent.”
Other challenges being faced by appraisers include a push for fee compression from outside sources, especially on residential appraisals.
That can lead to frustrations in the lending community – “particularly because of the quality of the data, the expense of getting that data and then the time to analyze that data,” Dowle said.
“The value of what we can provide seems to have been marginalized. I don’t know if it’s a little bit because of what we went through in COVID or if it’s just been marginalized because of the idea that AI can do what an appraiser does. It cannot.”
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
