Overbidding Backtracks in the GTA Real Estate Market

Just when it looked like the Greater Toronto Area’s housing market was heating up with bidding wars, the tables began to turn in April.

By Josh Sherman | 2 minute read

Wahi ranks the GTA’s top overbidding neighbourhoods according to where there are the biggest percentage differences between median asking and selling prices for homes.

There was a surprise pullback in bidding competition in the Greater Toronto Area housing market this April, according to new analysis from digital real estate platform Wahi.

After two consecutive month-over-month increases, the share of GTA neighbourhoods in overbidding territory fell to 39% in April, down from 43% in March. Another 4% were selling at-asking, while the remaining 57% were underbid. It was the first time this year that the share of neighbourhoods in overbidding territory declined on a monthly basis.

When looking only at condos, the share of underbidding neighbourhoods soars to 89%, with just 12 neighbourhoods (9%) in overbidding territory. It’s a different story in the non-condo segment, which includes detached, semi-detached, and row homes as well as freehold townhouses. Just 39% of neighbourhoods were in underbidding territory for non-condos, with the majority (58%) remaining overbid.

Wahi CEO Benjy Katchen notes that multiple factors could be behind the abrupt decline in bidding competition among homebuyers. “The recently announced increase to the capital gains tax may have temporarily discouraged some investors, while other homebuyers could be holding out for lower interest rates,” he explains.

“At the same time, we saw a large increase in inventory, which means homebuyers are able to take more time to find the right property and even put conditions on offers,” Katchen adds. There were about 16,000 new listings on the market in April, compared to approximately 11,100 at the same time last year, according to data from ITSO and the Toronto Regional Real Estate Board. In March, new listings totalled 12,700.

Typically, when an overbidding trend begins, it persists for several months. However, the most recent overbidding cycle only began in February, when the number of neighbourhoods that were overbid surged by 25 percentage points. April’s data marks an uncommonly quick turnaround since Wahi began tracking bidding activity in July 2022.

The Top 5 GTA Overbidding Neighbourhoods in April 2024 

In all, 110 neighbourhoods were in overbidding territory last month, led by Buttonville, in Markham. The remainder of the top five overbidding neighbourhoods were located in the City of Toronto. This marks a departure from past months when the leaders for homes selling above-asking tended to be concentrated outside of the 416 area code (in March, for example, all five top overbidding neighbourhoods were in York Region).

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 April 2024 

There were 174 neighbourhoods in underbidding territory last month. Once again, the most underbid neighbourhoods had higher median sale prices, but the spread between these prices and those of the top overbidding neighbourhoods has been shrinking in recent months. The top underbidding neighbourhoods were distributed across four different municipalities in April, with Eastlake, in Oakville, taking the top spot. Eastlake has been in the top five underbidding neighbourhoods for 11 consecutive months.

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 April.

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.