Most GTA Homes Are Selling Under-Asking, but Demand Is Brewing

Although home prices in most GTA neighbourhoods have been consistently bid down in recent months, more buyers are beginning to dip their toes in the market, Wahi analysis suggests.

By Josh Sherman | 3 minute read

The fall market has yet to see lower interest rates translate to a sustained increase in competition among GTA homebuyers.

While the vast majority of Greater Toronto Area neighbourhoods remained in underbidding territory in October, there are early signs that demand from homebuyers is on the rise following a back-to-back pickup in home sales.

Overall, 88% of GTA neighbourhoods with at least five home sales in October were in underbidding territory last month, according to digital real estate platform Wahi. That’s roughly flat from September — when 86% of neighbourhoods were underbid — but up seven percentage points compared to a year ago (81%). In October, an additional 9% of neighbourhoods were in overbidding territory, while 4% were selling at-asking. (Percentages don’t add up to 100% due to rounding.)

GTA Home Sales Post Back-to-Back Monthly Fall Market Increase for the First Time Since the Pandemic

Despite a slight decline in bidding activity in the GTA, the housing market has shown recent signs of possible green shoots.

September marked the first ramp up in bidding activity since March. Perhaps most notably, monthly home sales climbed on a month-over-month basis in both September and October for the first time since 2020, when the market was in overdrive during the pandemic.  

“The real test will be next year’s spring market,” says Wahi CEO Benjy Katchen. “It’s still too early to tell what the cumulative effects of the Bank of Canada’s rate cuts will be on the GTA’s real estate market.”

Seven Out of 10 GTA Homes Are Still Selling Below Asking

Some 70% of all homes that changed hands across the GTA in October sold for less than the seller’s asking price. As with the share of neighbourhoods in underbidding territory, the rate at which homes are selling for below-asking is roughly unchanged from September and August.   

The Top 5 GTA Underbidding Neighbourhoods in October 2024 

The top five neighbourhoods for underbidding were once again concentrated in upscale neighbourhoods with price points between $2 million and upwards of $4 million. Three out of five were found within the City of Toronto’s borders. North Toronto’s York Mills neighbourhood has now made the top five in each of the past four months.  

October also saw the Oakville neighbourhood of Eastlake return to the top five after a brief absence in September. Eastlake has been among the most underbid neighbourhoods in 16 of the past 17 months.

Eastlake’s regular presence on the list may have something to do with the type of homes for sale in the nieghbourhood. Previous Wahi research suggests that a greater number of unique custom homes — which could be harder to price due to a lack of comparable properties — may lead to unintentionally inflated list prices. 

This is just one of many factors that could lead to underbidding, which isn’t necessarily a sign of homes selling below market value. Wahi’s underbidding and overbidding measures can be influenced by seasonal factors, for example. Competition may decline as the quieter winter months approach. 

The Top 5 GTA Overbidding Neighbourhoods in October 2024 

The most overbid neighbourhoods were priced in the low- to mid-$1 million range, with three entries in the City of Toronto and two in Markham.

Raymerville, in Markham, is the lone carryover from September’s top five overbidding neighbourhoods. It has now been a leader for overbidding for three consecutive months.

As with underbidding, a variety of factors can influence overbidding activity. For instance, in addition to seasonality, sellers may list their homes for lower prices in hopes of sparking a bidding war.

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 307 neighbourhoods out of the GTA’s approximately 400 met this threshold in October, up from 284 in September. 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.