GTA House Prices Are Still Getting Bid up in Most Neighbourhoods

It’s a tale of two markets in the Greater Toronto Area: more than half of the region’s neighbourhoods were in overbidding territory when looking at houses, but there was much less competition for condos.

By Josh Sherman | 2 minute read

Wahi ranks the GTA’s top overbidding neighbourhoods according to where there are the biggest differences between median asking and selling prices for homes.

Overbidding activity in the Greater Toronto Area real estate market slid for the second consecutive month in May as potential buyers may have been waiting for the Bank of Canada’s rate announcement this week.

On the heels of April’s surprise pullback in bidding competition in the resale market, the share of GTA neighbourhoods in overbidding territory fell to 36% in May, according to digital real estate platform Wahi’s latest Market Pulse analysis. That’s down from 39% in the previous month and 68% a year ago. 

Some 60% of neighbourhoods were in underbidding territory last month, while homes were selling for at-asking in the remaining 4%. “This week’s rate cut from the Bank of Canada will likely change consumer psychology thereby giving homebuyers the confidence to bid on properties,” says Wahi CEO Benjy Katchen.

In the past, Wahi has noticed a correlation between interest rate expectations and bidding activity. Following back-to-back rate pauses in March and April of 2023, the share of overbidding neighbourhoods soared in May, rising to 68%, up from 57%. But when the BoC resumed hiking rates in June, the trend reversed, dropping from 62% to 38% between June and July. “Wahi’s next Market Pulse analysis will include June home sales and should provide insights into whether the rate cut affects GTA real estate,” says Katchen. 

A Tale of 2 Markets 

When broken down by property type, Wahi once again observed a considerable difference between bidding activity for houses (single-family homes) and condos. 

The single-family market, which includes detached and semi-detached dwellings, as well as row and townhouses, still hovered in overbidding territory overall. Wahi found a slight majority (53%) of neighbourhoods were overbid, a decline from 58% during the month prior.

For condos, just 11% of the neighbourhoods Wahi analyzed were selling over-asking.

The trend of more widespread overbidding on houses than condos began in February and the dynamic has not changed significantly (prior to February, overbidding had entirely disappeared from the market).

Although the share of overbidding neighbourhoods in the condo segment lagged far behind, April’s reading did trend upwards from 9% in April.

The Top 5 GTA Overbidding Neighbourhoods in May 2024 

When looking at all property types, 110 GTA neighbourhoods were in overbidding territory last month, with an additional 12 selling at-asking. The top overbidding neighbourhoods—which are the neighbourhoods with the largest median overbid amounts—were concentrated in the City of Toronto (the Neighbourhood of East York, Bickford Park) and York Region (Victoria Square, Bayview Hill).

Note that when a neighbourhood is in overbidding territory, it doesn’t necessarily mean that every home is selling above-asking. Instead, it’s a general reflection of overall market behaviour, which can be influenced by seasonal factors, for example, or decisions by sellers, such as to list homes below market value to try and attract more bids.

The Top 5 GTA Underbidding Neighbourhoods in May 2024 

Underbidding neighbourhoods totalled 180 last month. The top underbidding neighbourhoods were located in desirable, upscale communities. Four out of five had median selling prices north of $2 million and three of five were in Oakville.

How Wahi Ranks Overbidding and Underbidding Neighbourhoods

At the end of each month, Wahi compares the differences between median list and sold prices to determine whether neighbourhoods are in overbidding or underbidding territory, excluding those neighbourhoods with fewer than five transactions in a given month. A total of 302 neighbourhoods out of the GTA’s approximately 400 met this threshold in May, a decrease of four neighbourhoods from April. Data is sourced from the Toronto Regional Real Estate Board and Information Technology Systems Ontario.

The top overbidding and underbidding neighbourhoods are ranked by the median overbid or underbid amount. The median overbid and underbid amounts are calculated by subtracting the list price from the sold price of each individual listing in a given neighbourhood. These are then ranked by the median of all subtractions and presented as the median overbid or underbid amount. For the latest data on overbidding and underbidding at any point in the month, Wahi’s Market Pulse tool provides readings based on the past 30 days of transactions.