GTA Real Estate Market Approaching Multi-Year Low for Homebuyer Competition

Homebuyer competition in the Greater Toronto Area nears a multi-year low, but a pullback in listings suggests conditions may shift in the short-to-medium term.

By Josh Sherman | 4 minute read

At the end of each month, digital real estate platform Wahi compares the differences between median list and sold prices to determine whether neighbourhoods are in overbidding or underbidding territory.

The Greater Toronto Area’s real estate market continues to present conditions that heavily favour homebuyers as the level of bidding competition approaches a multi-year low, suggests new analysis from digital real estate platform Wahi.

In June, just 6% of the 306 GTA neighbourhoods in which at least five resale homes changed hands were in overbidding territory last month, down from 7% of the 303 neighbourhoods that met the sales minimum in May. The overwhelming majority of neighbourhoods (93%) were in underbidding territory this June, and a handful of others (1%) were selling at asking. During the same month last year, 5% (289 neighbourhoods) saw prices bid higher. 

This is based on comprehensive analysis by Wahi of list and sold prices for all homes that changed hands on the resale market last month, including condos and single-family properties. 

“While the scales are very much tipped in favour of homebuyers across most GTA neighbourhoods, there are some signs that could spark a bit more competition in the coming months,” says Wahi Economist Ryan McLaughlin.

The number of new listings in the GTA in June also reached a multi-year low for the month, driven by ongoing weakness in the condo segment. “If we continue to see fewer homes coming on the market in the coming months, that could begin to affect supply and, eventually, prices,” McLaughlin continues. “However, with the summer slowdown setting in, homebuyers do have more time right now to negotiate lower prices, particularly for condos,” he adds.

Indeed, bidding competition for condos is almost non-existent. Across all of the 123 GTA neighbourhoods with a minimum of five condo transactions, only one (Lasalle, in Burlington) was in overbidding territory this June. Overall, 98% of neighbourhoods were underbid when only looking at condo sales. For comparison, 88% of the 259 neighbourhoods with at least five single-family home sales were underbid, while 11% (29 neighbourhoods) landed in overbidding territory and 1% (3 neighbourhoods) were selling at-asking. Single-family homes include detached and semi-detached homes as well as row and townhomes (without maintenance fees).

To gauge overall market conditions in June, Wahi also analyzed the share of all listings — regardless of neighbourhood — that sold for more than asking, less than asking, or for the list price. Nearly three-quarters (74%) of all homes sold for less than the list price in the GTA last month, a marginal increase from a year ago (72%). That’s also a slight uptake from this May (73%). 

Some Old Toronto Neighbourhoods Attract Multiple Offers

Although bidding activity edged lower once again in June — and it sits near the all-time lows since Wahi began tracking the market in July of 2022 — certain types of neighbourhoods have still seen listings attract multiple offers with some regularity.

These neighbourhoods have generally been older, more established ones situated within the borders of the Old City of Toronto — especially those in the east end. This was true of the top five overbidding neighbourhoods in June, led by Riverdale for the second consecutive month. 

Note that a variety of factors can influence bidding trends, from seasonality to selling strategies. For instance, in some cases, REALTORS® may be more likely to price a home below market value in hopes of attracting multiple offers.

In addition to sharing similar location characteristics, the top overbidding neighbourhoods also saw homes sell for considerably less than the leading underbidding neighbourhoods. Median sale prices in overbidding neighbourhoods all fell within the $1-1.5 million range, versus the top underbidding neighbourhoods, where median sale prices ranged from $1.5 million to north of $4 million.

For the third straight month, Lawrence Park maintained the crown for most underbid neighbourhood. The remaining four other neighbourhoods were scattered across the northern sections of Toronto, as well as Mississauga and Brampton. 

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 306 neighbourhoods out of the GTA’s approximately 400 met this threshold in June, up from 303 in May. 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.