Greater Toronto Area Homebuyers Bid Home Prices Down in 98% of Neighbourhoods This October

Early indications of a more competitive fall for the GTA’s housing market slipped away in October with another rise in underbidding activity.

By Josh Sherman | 4 minute read

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.

Following a brief upswing in overbidding activity earlier this fall, the Greater Toronto Area’s real estate market is back to nearing all-time lows in terms of homebuying competition.

Some 98% of the GTA’s 296 neighbourhoods with at least five home sales last month were in underbidding territory this October, with the remaining 2% seeing homes selling for more than the list price. While buyers have had the upper hand across much of the region this year, the share of underbidding neighbourhoods in the GTA is up noticeably from September, when prices were being bid higher in nearly one-in-10 neighbourhoods (8%).

“It looked like the fall market was beginning to heat up, but October brought with it similar conditions to the summer, when competition appeared to be at a standstill,” says Wahi Economist Ryan McLaughlin. “What this means for homebuyers is more choice and more room for negotiation with sellers.”

These favourable conditions, combined with another rate cut from the Bank of Canada last month, are generally supporitve of homebuying intentions, though some may prefer to wait until the New Year before testing the market, McLaughlin adds. 

The single-family home segment was slightly more competitive than the condo market in October, though less so than the previous month. Looking exclusively at sales of single-family homes, including detached and semi-detached houses, as well as row and town homes, 95% of neighbourhoods were underbid, compared with 99% for condos. The gap was wider in September, when 88% of neighbourhoods were underbid for single-family homes, versus 98% for condos. This suggests the overall increase in underbidding in October arose from softer conditions in the GTA’s low-rise market.

Across the entire region and counting all resale transactions regardless of neighbourhood, eight-in-10 homes sold for below or at the list price.

Even within the six neighbourhoods that did see home prices generally bid up last month, the increases were generally muted. Just two of these neighbourhoods had a median overbid amount in excess of $50,000 (Toronto’s Runnymede and Riverdale), and in another two the difference was less than $10,000 (Lynde Creek, in Whitby, and Ford, in Milton).

In October, the majority of the top five underbidding neighbourhoods shifted outside of the City of Toronto. Four out of five were found outside of the 416 area code last month, whereas in September, Oakville’s Eastlake — which made the list again this month — was the lone underbidding leader located beyond the city’s borders.

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 296 neighbourhoods out of the GTA’s approximately 400 met this threshold in October, up from 289 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.