Real Estate 101 Buy Bidding Wars Return to Some Pockets of the GTA Housing Market Bidding Wars Return to Some Pockets of the GTA Housing Market FollowFollowFollowFollow More GTA neighbourhoods entered overbidding territory in September, but the vast majority of homes are still selling below asking — especially condos. By Josh Sherman | 4 minute read Oct 6 Interest rates came down in September, while homebuying competition in the GTA went up. As the start of the normally busier fall market got underway, there was a noticeable uptick in bidding competition among homebuyers in the Greater Toronto Area, though it was highly dependent on housing type and location. This September, 8% of neighbourhoods across the region in which at least five homes changed hands were in overbidding territory, compared to just 1% in August. A remaining 92% were underbid, while 1% were selling at asking (percentages may not equal 100% due to rounding). “We shouldn’t read too much into one month of more widespread overbidding activity, given the role seasonality plays,” cautions Wahi Economist Ryan McLaughlin. He also emphasizes that September’s increase in homebuyer competition comes on the heels of an especially quiet August, one which matched a three-year high for underbidding. “However, the latest numbers do ultimately suggest that more homebuyers were involved in multiple-offer situations, and, if the trend persists, it could be an early sign of recovery,” he adds. The Bank of Canada’s latest rate cut, on Sept. 17, potentially encouraged some homebuyers to make a move in the second half of the month. The cut was widely anticipated, including by Wahi’s latest Rate Outlook Panel. While the cut may not meaningfully improve affordability, it can improve market sentiment and homebuying intentions. The month-over-month rise in overbidding was driven by demand for single-family properties, including detached and semi-detached houses as well as row and townhomes. In September, 10%, or 23, of the 228 neighbourhoods where five or more single-family homes sold were overbid, up from 4% during the previous month. Seventeen of these neighbourhoods were in the City of Toronto. Unlike what was observed in the single-family segment, the beginning of the fall homebuying season didn’t appear to boost the GTA’s condo market. Not a single one of the 108 GTA neighbourhoods with five condo sales was in overbidding territory last month, with 98% underbid and an additional 2% selling at asking. This mirrors August, when 99% of the 102 neighbourhoods that met the five-sale minimum for condos were in underbidding territory. When counting all transactions across the region regardless of neighbourhood, 82% of condos sold for less than the list price last month, versus 71% of single-family homes. While demand for single-family homes appeared to edge higher in September, the data suggest that the vast majority of GTA homes of all types continue to sell for less than the list price. The top overbidding neighbourhoods in the GTA last month were concentrated in the City of Toronto, split between the city’s east end (The Danforth and Riverdale) and the west end (Dovercourt Park and Harbord Village). A common occurrence since Wahi began tracking bidding competition in July of 2022, the more competitive hot spots had considerably lower median prices than the top underbidding neighbourhoods. Four out of the top five neighbourhoods for underbidding were also found in Toronto proper. All four neighbourhoods were located in and around the city’s midtown area, particularly in wealthier enclaves with median prices in the multi-million-dollar range. Eastlake was the lone non-Toronto entry. The Oakville neighbourhood has been the most consistently underbid GTA neighbourhood in recent years, a fact owing at least partly to a high concentration of newer custom upscale homes. It can be difficult to determine the true market value of these homes as there are few, if any, recently sold properties that are comparable. The Smarter Way to Buy & Sell A smart move starts with Wahi. Expert Realtors with unique data-driven insights and up to 1.5% cashback - an average of $15k* after closing on your new home—it all adds up. LEARN MORE 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 289 neighbourhoods out of the GTA’s approximately 400 met this threshold in September, up from 278 in August. 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. Josh Sherman Wahi Writer You might also like BuyFact vs. Fiction: Debunking 7 Common Real Estate Myths in Canada Oct 1 Anne Alkok, BuyAsk a Wahi REALTOR®: What Conditions Do You Recommend Including in an Offer, and Why? 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Anne Alkok, BuyAsk a Wahi REALTOR®: What Conditions Do You Recommend Including in an Offer, and Why? Sep 26