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Market Value

Learn what market value means in Canadian real estate, how it’s determined, and why it’s essential for pricing, financing, and smart investing.

Market Value

May 22, 2025


What is Market Value?

Market value is the estimated price a property would sell for on the open market, assuming both buyer and seller are knowledgeable, willing, and acting without pressure.

Why Market Value Matter in Real Estate

In Canadian real estate, market value serves as the benchmark for pricing, financing, taxation, and investment decisions. It reflects the true worth of a property based on factors such as:
  • Location and neighbourhood trends
  • Recent comparable sales (comps)
  • Property condition and features
  • Market supply and demand
  • Economic conditions and interest rates

Market value is determined through appraisals, Comparative Market Analyses (CMAs) by REALTORS®, or buyer/seller negotiation. It's distinct from assessed value (used for property tax) and listing price (seller's asking amount).

Understanding market value helps sellers set realistic prices, prevents buyers from overpaying, and enables lenders to ensure that a mortgage doesn’t exceed the property’s worth. Investors also rely on accurate market valuations to assess return potential and risk exposure.

In competitive markets, emotional bidding can inflate sale prices above market value, increasing risk for buyers if a lender’s appraisal doesn’t align. Buyers should always seek professional valuation guidance before making a final offer.

Example of Market Value

A home is listed at $850,000, but a local REALTOR®’s CMA shows its market value to be closer to $825,000 based on similar recent sales.

Key Takeaways

  • Reflects the price a property would fetch on the open market.
  • Based on local comps, condition, and economic trends.
  • Used by buyers, sellers, lenders, and appraisers.
  • May differ from assessed or listing price.
  • Vital for fair negotiation and financing decisions.

Related Terms

Additional Terms

Rent Control

Rent control refers to government regulations that limit how much landlords can increase rent for residential tenants each year.. more

Receivership

Receivership is a legal process where a court or secured creditor appoints a receiver to take control of a borrower’s assets, such as property or. more

REALTOR

A REALTOR is a licensed real estate professional who is a member of the Canadian Real Estate Association (CREA) and adheres to its Code of Ethics and. more

Property Use History

Property use history refers to the documented past uses, functions, and occupancy of a property, which may affect environmental risk, zoning, or. more

Property Management

Property management is the oversight and administration of real estate assets on behalf of the owner, covering leasing, maintenance, financial. more

Property Maintenance

Property maintenance refers to the ongoing upkeep, repair, and management of a building or land to preserve its safety, functionality, and appearance.. more

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