Appraisal expert shares top advice for brokers and borrowers navigating an unpredictable environment
Cooling housing markets and unpredictable home price trajectories across many Canadian cities are presenting plenty of challenges for homebuyers hoping to secure a mortgage – and the appraiser community is also facing significant hurdles in their efforts to accurately judge a property’s value.
In many cases, that’s because of a persistent gap between what homeowners and mortgage brokers expect a property to be worth and what thin transaction data can actually support, according to former Appraisal Institute of Canada (AIC) president Terry Dowle (pictured top).
He told Canadian Mortgage Professional that while home sales across major markets such as Toronto and Vancouver may have ticked modestly upwards in recent months, prices are still sliding – meaning it’s still difficult to pinpoint precisely what a specific property is worth.
“When the real estate boards publish their market reports and they say the market is improving, yes, it’s improving from a transaction perspective,” he said. “But that doesn’t mean that the market value is improving.
“So there’s a bit of a disconnect in that understanding of what we do as appraisers and what the homeowner, or the person trying to place a mortgage, is looking for.”
What mortgage brokers need to keep in mind about appraisals
Declining property values aren’t a recent phenomenon across markets like Toronto and Vancouver, and Dowle has long urged brokers and hopeful buyers to lock in an appraisal as early as they can in the mortgage process.
That remains the case in 2026. “If we could have them request the appraisal before they paper the document and send it to the lender, they should engage with an appraiser,” he said. “The earlier you can order the appraisal before you’ve submitted your documentation or papered your file, the better you’re going to be because then you’ll have a true picture of what that property value is.”
The risk by waiting too long is a possible costly restart if a valuation comes in well below the number used in the mortgage application – a scenario that’s all too common in markets like Toronto, especially in the condo sector where price depreciation is showing no sign of slowing.
While brokers’ influence over appraisal decisions is extremely limited, additional context can also help. Details on hidden upgrades, permitted renovations, or a comparable off-market sale a broker is aware of won’t necessarily change an appraiser’s mind but “certainly give me additional data points for my consideration which might change my opinion of value,” Dowle said.
The bigger problem: thin data
The market itself isn’t the biggest structural problem for appraisers. Rather, it’s the shrinking pool of transactional data available to support their reports, a shift Dowle said has become more pronounced over roughly the past two years.
The scarcity of data, according to Dowle, has forced appraisers to adopt more of a “shotgun” approach to understand the market – and many are now gravitating back toward practices common decades ago, re-engaging directly with real estate agents and other market participants to confirm sales rather than relying solely on data pulled from a computer.
Market watchers have asked the same question for months, if not years: When are things expected to turn around, and values to stabilize? Dowle sees the market staying in a holding pattern for some time, influenced in part by the wave of mortgage renewals still taking place across the country.
Clearer signs of stabilization are likely more than a year away, he said – also because many buyers are hoping for a deal in a market that hasn’t rebounded.
The main message for industry members in that environment: communication in both directions remains the fix most within reach. The ideal exchange in a difficult market, according to Dowle, is a broker flagging an expected value up front, giving the appraiser a chance to raise concerns before the file goes further.
“We can’t guarantee an appraised number until we do all of our research,” he said. “But the earlier we understand the demands of what you’re looking for as a broker, the better we can communicate with you – so there’s no surprises, and we can hopefully find a solution so that you can still place a mortgage somewhere.”
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