How Can Homeowners Prepare For A Recession
After two very strong years in the housing market, the signs of a cooldown are very apparent. Coinciding with real-estate strength has also been high inflation. While a number of global factors are contributing to our current situation, higher mortgage interest rates are impacting the housing market and giving rise to recession-like indicators. The luxury home market will certainly see the effects if even a mild recession takes hold. Understanding how these fluctuations in the market can affect you will help you determine the best course of action for you and your family – especially if buying and selling is on the horizon.
What is a recession?
The term “recession” is used frequently to describe any economic slowdown. Officially, it’s defined as two or more quarters of negative GDP growth. The nature of this potential, or current, recession – depending on the latest performance numbers – does come with its own nuances. Unlike previous recessions, including the one that occurred early in the pandemic as a result of global slowdowns brought on by the pandemic itself, this one isn’t being preceded by an unforeseen drop in consumer demand. The dynamics are significantly different now. The Bank of Canada’s interest rate hikes, in an attempt to slow an unsustainable inflation rate, have caused many to see this recession as an adjustment, or a correction, rather than the result of crashing markets.
How does a recession affect homeowners?
Homeowners can expect to see the real estate value of their homes erode to some extent during a recession period. How much housing prices go down is linked to the length and magnitude of the recession. Studies conducted by the Organization for Economic Co-operation and Development (OECD) found that, over four previous recessions, properties took an average hit of 6.1%.
Turbulence can be expected for those in the process of selling their home. The feverish pace of condition-free sales has come to an end, so sellers can expect their homes to be on the market longer. Buyers across the housing landscape will be proceeding with caution as they navigate economic uncertainty combined with rising interest rates.
Rising interest rates will significantly affect those who aren’t locked into a fixed mortgage rate – or who are facing mortgage renewal in the not-so-distant future. Depending on the dynamics of the mortgage, this can be a financial stressor for many families. Some mitigation can be achieved by taking a closer look at household expenses and developing a budget. Even the action of analyzing monthly expenses can reveal opportunities to become more efficient or even eliminate expenses that may be redundant or unnecessary.
What does a recession do to the housing market?
In general, and as expected, any economic downturn is likely to result in fewer homes being purchased and lower sale prices. In October of 2022, the Canadian Mortgage and Housing Corporation (CMHC) released their housing-market predictors based on rising interest rates and the onset of a recession. In their worst-case scenario, home values would drop 5% by the middle of 2023 and, perhaps more noticeable, would be home sales declining 34%.
How are luxury home prices affected in a recession? Is it a good time to buy?
Luxury home buyers and sellers both feel the pinch during a recession. This one, in particular, could bring additional stresses to the market. In previous recessions, interest rates have been lowered to help stimulate the economy. Given the efforts to put the brakes on spiraling inflation, that’s not a feasible option for the Bank of Canada.
The effects of a recession are typically stronger in the luxury-home market. The universe of buyers is substantially smaller and the investment is larger – resulting in a significantly longer sales process even in a non-recession market. These dynamics can amplify the effect. In late 2022, RE/MAX Canada released their 2023 housing-market outlook. Their findings reflect a cooldown in luxury home sales and expect that will continue throughout 2023 – a segment that will feel the pressures of the average residential sale prices in the Greater Toronto Area dropping by up to 11.8%.
There are benefits to buying in a recession. Prices are falling and inventory is staying on the market longer, giving buyers far more options than has been seen over the past two years. Overall affordability must be considered in a purchase. With rising interest rates, a lower-priced luxury home must still be evaluated carefully for long-term wealth management. If you were fortunate enough to sell your previous home before the real-estate market cooled, this could be an opportune time to buy.
Preparation is a wise investment.
Having a sense of what is happening and what could happen to your particular situation is crucial to determining your next luxury-home market move. The recession-effect can also vary between major markets. Early indicators have shown differences between luxury-home sales in the GTA, Vancouver, and Alberta. Honing in on your current (and destination) market is important to fully understand what to expect. So far, experts are predicting this “recession” will be a market correction with a soft landing. Maintaining a watchful eye and a close connection with trusted real-estate experts will help ensure the right decisions are made during this less-than-stable time.
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FALL MARKET KICKOFF: September 2025 Real Estate Market Update
As summer winds down, the Greater Toronto Area (GTA) real estate market is shifting once again—this time with an important boost from the Bank of Canada’s recent interest rate cut. On September 17, 2025, the Bank lowered its policy interest rate to 2.5%, marking a significant move that is expected to reinvigorate buying activity across the region.
Market Snapshot: August 2025 (TRREB) 
According to the Toronto Regional Real Estate Board (TRREB), August brought encouraging signs of stability:
- Sales: 6,232 transactions across the GTA, a 4.6% increase from August 2024.
- New Listings: 13,119, down slightly year-over-year, helping balance supply.
- Average Selling Price: $982,880, nearly flat compared to last year (+0.4%).
- Trend: Balanced conditions are giving both buyers and sellers room to maneuver, with the recent rate cut expected to stimulate fall demand.
City & Regional Highlights
Toronto 
Toronto continues to see steady demand for condos and townhomes, appealing to buyers looking for affordability in the core. Detached homes are moving more cautiously, but price stability suggests confidence returning to the market.
Mississauga 
Mississauga remains a buyer-friendly market, especially in the detached and semi-detached segments. With borrowing costs easing, families upsizing or relocating may find strong value in the fall.
Oakville 
Luxury demand in Oakville is regaining traction. The combination of limited inventory and lower financing costs positions this market for an active fall season, especially for executive homes and lakefront properties.
Burlington 
Burlington continues to attract buyers migrating west from Toronto. The city’s blend of affordability, lifestyle, and community feel has kept prices steady and competitive.
Muskoka 
Cottage country remains strong, with buyers eyeing investment properties and second homes. While activity softened slightly through the summer, the rate drop could encourage more buyers to act before year-end.
What This Means for Buyers & Sellers
With interest rates now at their lowest level in two years, affordability is improving across the GTA and Muskoka. Buyers who were waiting on the sidelines are expected to re-enter the market this fall, while sellers may benefit from increased competition for well-priced homes.
At Regan Irish & Associates, we specialize in helping clients navigate market shifts with confidence. Whether you’re buying a luxury home, selling a family property, or investing in Muskoka, our market insight and negotiation expertise ensure you get the best results.
1320 Cornwall Rd Unit 103, Oakville, ON L6J 7W5
905.842.7677
Visit reganirish.com——
August 2025 GTA Real Estate Market Update | Regan Irish
The August 2025 GTA Real Estate Market Update reflects renewed momentum and affordability in Toronto, Oakville, Mississauga, Burlington, and Muskoka. Thanks to steady interest rates and appealing home prices, July proved surprisingly dynamic. Let’s dig into the numbers and what they mean for you.
Interest Rates Remain Stable — Affordability Fueling Activity
In July 2025, the Bank of Canada maintained its key rate at 2.75%, its third consecutive pause. With lower borrowing costs now more accessible, affordability is encouraging a wave of renewed buyer activity.
GTA Market Overview: Sales Surge, Prices Slightly Dip
- Home Sales: 6,100+ transactions region-wide, marking a 10.9% increase YoY and the strongest July since 2021.
- Month-over-Month: Seasonally adjusted sales rose 13% from June to approximately 5,744 units, the biggest monthly gain in nine months.
- New Listings: Up 5.7% YoY, totaling 17,613 new offers.
- Price Trends:
- The MLS® Home Price Index (HPI) Composite Benchmark fell 5.4% YoY.
- The average GTA selling price dropped 5.5% YoY to around $1,051,719.
- Word on the street indicates the HPI drifted slightly lower—about $979,000, down 0.2% from June.
What It Adds Up To: Buyers are back in force—sales are outpacing new listings while prices softened, creating renewed market opportunities.
City Highlights
Toronto
A more balanced landscape—but some segments remain soft. Condos and detached homes see inventory rising; semis are steadier.
Oakville, Mississauga, Burlington & Muskoka
While TRREB doesn’t break down by city in these reports, regional trends suggest:
- Mississauga & Burlington: Strong rise in listings and dipping average prices give buyers leverage.
- Oakville: Stability in demand for luxury keeps discounts modest.
- Muskoka: Continued strong interest in sub-$2M waterfront properties should benefit from broader GTA momentum.
What This Means for You
- For Buyers:
Renewed affordability, rising inventory, and favorable interest rates make August a prime time to move. - For Sellers:
A more balanced market—strategic pricing and quick response will be key to success. - For Investors & Cottage Buyers:
Strong July sales in the GTA point to increasing investor interest; Muskoka remains a high-value lifestyle and investment destination.
Work With the GTA Real Estate Experts
Whether you’re planning to buy a Muskoka cottage, invest in a luxurious Oakville property, or explore options across Toronto, Mississauga, or Burlington, now is the time to act.
Regan Irish & Associates specializes in luxury, resale, and investment properties across the GTA and Muskoka. Our market insight and negotiation skills help you get the best results—whether buying, selling, or investing.
1320 Cornwall Rd Unit 103, Oakville, ON L6J 7W5
905.842.7677
Visit reganirish.com
Let’s make today’s market your opportunity—contact us today!
