98% of GTA Neighbourhoods Are in Underbidding Territory

Underbidding activity continued to intensify in the Greater Toronto Area’s housing market last month, with only four neighbourhoods seeing prices bid up.

By Josh Sherman | 4 minute read

You could count the number of GTA neighbourhoods in overbidding territory last month on one hand.

Homebuyers had already been holding the cards in the Greater Toronto Area for some months, but they were dealt an even stronger hand in August as the share of neighbourhoods in underbidding territory across the region matched a three-year high.

In August, 98% of the 278 GTA neighbourhoods with at least five home sales during the month landed in underbidding territory, with the rest selling at or above asking.

This represents an increase from July, when 95% of neighbourhoods were underbid, as well as compared to the same time a year ago, when the share of underbid neighbourhoods reached 89%.

August represents just the third time since Wahi began tracking GTA homebuying competition in July of 2022 that underbidding has been so widespread at the neighbourhood level. In both December 2023 and January 2024, 98% of neighbourhoods were also in underbidding territory.

“The summer months are typically softer than the spring for home sales, but the extent of underbidding activity we’re witnessing in the GTA suggests there’s more at play than homebuyers taking vacations,” says Wahi Economist Ryan McLaughlin.

“The condo market downturn is part of the story, but we’re also seeing more underbidding activity in the single-family home segment,” McLaughlin continues.

For example, when looking only at single-family home sales, 94% of the 223 neighbourhoods with at least five transactions of this property type were underbid last month. That nearly matches the extent of underbidding in the condo market. Some 97% of the 102 neighbourhoods with at least five condo sales were in underbidding territory.

McLaughlin notes that in addition to seasonal factors limiting homebuying activity — and, consequently, competition — listings sometimes appear bid down because sellers may not have set realistic prices to begin with. Conversely, a neighbourhood could be overbid as a result of sellers listing homes below market value in hopes of attracting multiple offers.

GTA-wide, 79% of homes that changed hands in August sold for less than the list price, up from 76% in July and 71% a year ago.

Among the five neighbourhoods with the strongest underbidding trends in August, two were carryovers from the previous month: York Mills and Rural Vaughan. These neighbourhoods tended to be on the pricier side. Three out of four had a median sale price at or around $3 million, whereas the GTA-wide median home price for the month of August was $900,000.

Of the four neighbourhoods in which homebuyers bid prices higher in August, Brock Ridge, in Pickering, was the lone repeat from July. Note that in two of these neighbourhoods, the median overbid amount was less than $2,000.

Methodology: 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 278 neighbourhoods out of the GTA’s approximately 400 met this threshold in July, down from 296 in July. Data is sourced from Information Technology Systems Ontario (ITSO) and the Toronto Regional Real Estate Board (TRREB).

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.