Entering into the Toronto real estate market with a $1M budget can open some rather luxurious doors. But just a few months ago, that certainly wasn't the case.

During the February peak, lackluster condo units and teardown houses were selling well over the $1M mark, forcing some buyers to up their budget, lower their expectations, or drop out of the market altogether. But as prices continue to drop, a $1M budget can now go much further.

A new report from real estate platform Strata points to Holmes Avenue in North York as a prime example of where this can be seen. Back in February, a two-bedroom, two-bathroom, 1,200 sq.-ft townhome on the street sold for $1.16M. And in September, a neighbouring townhouse with the same specifications sold for just under $1M -- a roughly $160,000 difference.

And it's far from the only example. Over at 555 Wilson Avenue, just east of Yonge Street, a two-bedroom, 1,350-sq.-ft penthouse unit sold in September for $927,000. Compare this to February when a smaller unit in the same building with one less bathroom and no den area sold for roughly the same price ($900,000), and the market shift becomes even more clear.

4 647ca9b7 8327 4655 8b72 d7aa4316a8ca 1200 1024x682The penthouse unit inside 555 Wilson Avenue. (Royal LePage Signature Realty)

Although it would seem that buyers' budgets would be going further now, allowing them to buy homes that seemed out of reach just a few short months ago, realtor Osman Omaid says that buyers are continuing to feel the crunch from the Bank of Canada's rapid interest rate hikes.

"Buyers are still budgeting the same for monthly expenses, however that doesn't necessarily mean they have the same budget on purchasing a house," Omaid told STOREYS. "A lot of buyers are unfortunately at the mercy of interest rates. As interest rates go up, borrowing power comes down. Therefore, they have no choice but to lower their budget, even though their monthly housing expenses stay the same."

In the same vein, realtor Milan Mitrovic says that he's noticed a shift in the types of buyers who are entering the market right now and benefitting from the price shift.

"From personal experience, I am finding that first time home buyers are substantially less active, and some are completely out of the market due to the increase in interest rates, while savvy investors that are not reliant on substantial mortgages are coming in to take advantage of the relatively low prices and high rental rates," Mitrovic said.

But those who can buy right now are opening themselves up to opportunities like a sprawling 1,710-sq.-ft corner suite in Etobicoke that sold in mid-September for $995,000 -- something Strata Broker of Record Robert Van Rhijn says would have been unheard of earlier this year.

11 707dc852 c65f 4e7a 9fa8 0acd6cc03fcc 1200 1024x675Unit 1707 inside Etobicoke's 1300 Islington Avenue. (Royal LePage Supreme Realty)

And it's not to be forgotten that those who do buy right now also have much more power compared to buyers who purchased earlier this year.

"Buyers have more leverage in the market, meaning we're seeing much less bidding wars and firm offers," Omaid said. "Buyers can finally include conditions in their offers and take their time with decisions. We're not seeing properties getting sold in a matter of days, it's usually a matter of weeks now. The general stress level on the buyer's side is just much less now."

As to be expected, the shift hasn't been so welcomed by owners who are thinking about or are actively trying to sell their property, especially those who bought during the peak and are now grappling with the fact that their $1M purchase may no longer be worth that amount.

"There's definitely some frustrations on the Seller side, however it's all about adapting to the market," Omaid said. "Sure they'll be selling in a down market, however they're also buying in a down market as well."