Selling your house in a soft market feels like bad timing, but when you are downsizing you buy in the same market you sell in. In September 2026 the average GTA detached price was down 5.1% from a year earlier. A lower sale price on a larger home is largely offset by a lower purchase price on a bungalow, and slower conditions give downsizers something they rarely had in recent years: time and choice.
Key takeaways
- What matters is the gap between your sale price and purchase price, not either number alone.
- When both fall by the same percentage, the gap shrinks only a little.
- Lower prices also reduce land transfer tax and commission.
- Slow markets make it easier to buy with conditions, including the sale of your home.
- Good bungalows are still scarce, so the purchase side needs the most planning.
A worked example
Suppose a year ago your two-storey home would have sold for $1,500,000 and the bungalow you wanted was $1,000,000. Now assume both are 5% lower. These are round numbers for illustration.
| A year ago | Today | |
|---|---|---|
| Sale price of your home | $1,500,000 | $1,425,000 |
| Price of the bungalow | $1,000,000 | $950,000 |
| Difference freed up, before costs | $500,000 | $475,000 |
| Ontario land transfer tax on the purchase | $16,475 | $15,475 |
The equity you free up drops by $25,000, not by the $75,000 your sale price fell. Land transfer tax and commission are a little lower too. In Toronto, where a second municipal land transfer tax applies, the tax saving doubles.
The reverse is also true. Waiting for prices to recover means the bungalow will cost more as well.
What a slower market gives you
- Conditions are back. Financing and inspection conditions are normal again on many homes, and some sellers will consider an offer conditional on the sale of your property.
- Time to compare. GTA homes averaged 34 days on market in September. You can view a bungalow twice before deciding.
- Room to negotiate. Particularly on bungalows that need updating.
- Flexible closings. Sellers are more willing to match dates so you move once.
The risks to plan for
- Your home takes longer to sell. Price it against the last 60 to 90 days of sales and prepare it properly.
- The right bungalow is hard to find. Supply is the real constraint. See the downsizing squeeze.
- Owning two homes. If you buy firm before you sell, you may need bridge financing or carry two properties for a while.
Buy first or sell first?
| Approach | Advantage | Risk |
|---|---|---|
| Sell first | You know exactly what you can spend | Pressure to find a bungalow before closing |
| Buy first, firm | You secure the right home | Carrying two homes if yours is slow to sell |
| Buy conditional on sale | Protection on both sides | Sellers may prefer a cleaner offer |
In a slow market with scarce bungalows, many downsizers get their own home ready to list, then make a conditional offer when the right bungalow appears. A long closing on your sale also builds in time.
Bungalow tip: Get your home listing-ready before you start viewing bungalows seriously. When the right one comes up, being able to list within days makes a conditional offer far more credible.
Frequently asked questions
Is there tax on the money I free up?
The sale of your principal residence is generally exempt from capital gains tax in Canada. Confirm your own situation with an accountant, especially if part of the home was rented.
What is bridge financing?
A short-term loan that covers the gap when your purchase closes before your sale. Lenders usually want a firm sale agreement on your existing home.
How should I prepare my home to sell?
Start with our seller’s guide, home staging tips and our guide to decluttering before a move.
See what your next home could look like
Browse bungalows for sale across Ontario and save a search so you see new listings first.
This article is general information as of early October 2026, not legal, tax, mortgage or insurance advice. Rules and numbers change, so confirm the details for your situation with a licensed professional.
