Bidding on GTA Homes Down as a Summer Freeze Sets in

Rate relief has yet to spark an increase in bidding activity in the Greater Toronto Area housing market as July data suggests more and more homes were selling below-asking.

By Josh Sherman | 3 minute read

Some 14% of Greater Toronto Area neighbourhoods were in overbidding territory last month.

Bidding competition among Greater Toronto Area homebuyers in July eased for the fourth straight month even as the Bank of Canada embarked on its second rate cut of the year, according to Wahi’s newly released July 2024 Market Pulse Report.

Across 276 neighbourhoods where there were at least five home sales last month, only 14% were in overbidding territory, down from 27% in June. An additional 4% were selling at asking, while 82% were underbid. 

“The spring selling season that never was has been followed by a slower-than-usual summer,” says Wahi CEO Benjy Katchen.

However, Katchen notes that homebuyers who are shopping around have a lot of choice as there are almost 10,000 more active listings on the market than a year ago. “This is helping more buyers negotiate better deals and purchase homes below-asking,” he adds.

In July, 4,991 homes changed hands across the GTA, down about 12% from a year ago. Meanwhile, the median price of a home in the region was $960,000, a decline of approximately 2% compared to July 2023. With bidding activity down, the average number of days that homes remained on the market increased to 24, up from 17 last July.

While seasonal factors can result in less bidding competition during the summer months, the share of overbid neighbourhoods was also down on a year-over-year basis. In July 2023, more than a third (38%) remained in overbidding territory.

The share of GTA neighbourhoods in overbidding territory has now dropped to the lowest level since January, when 0% of neighbourhoods were overbid. 

Single-family homes continue to attract more attention than condos. When only looking at single-family homes, 23% of neighbourhoods were overbid, compared to 6% for condos. However, the gap between the two segments is rapidly shrinking, as June saw 39% of neighbourhoods bid up for single-family homes, while condos were at 7%. 

The Top 5 GTA Overbidding Neighbourhoods in July 2024
 

While the majority of the top five overbidding neighbourhoods in June were located in York region, there was a shift to the City of Toronto in July. Three of the top five overbidding neighbourhoods last month were found within the city.

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 July 2024 

For the 14th straight month, Oakville’s Eastlake was in the top five for underbidding. It is the only carryover from June’s top five.

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 276 neighbourhoods out of the GTA’s approximately 400 met this threshold in July, down from 300 in June. 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.