70% of homes are selling for below list price in the Greater Toronto Area

More homes sold for less than the list price in the Greater Toronto Area this summer.

Although the Bank of Canada lowered the key interest rate again this week, the real estate market has remained sluggish.

A new report from real estate platform Wahi found 70 per cent of homes purchased across the Greater Toronto Area in August sold for less than listed.

A remaining 27 per cent of homes were still selling above asking, while three per cent sold for the seller’s asking price.

Bidding activity remained somewhat stronger for single-family homes than condos, Wahi’s August 2024 Market Pulse Report found.

“Many homebuyers who decided to act this August before the fall market gets underway managed to obtain below list prices,” said Wahi CEO Benjy Katchen. “This was especially true for condo buyers.”

Katchen added that when a home sells for less than the asking price, it doesn’t necessarily mean the homebuyers got a bargain.

“The home could have been listed above what it was reasonably valued at,” he said.

There are several examples, however, of sellers taking a loss in recent months. A Brampton home sold at a loss of around $334,000 in August. And a Mississauga three-bedroom home sold for well under the average price.

The August underbidding numbers are higher than previous months. In July, 68 per cent of homes sold for less than the listed price, 29 per cent were bid up, and three per cent changed hands at the listed price.

In August 2023, 60 per cent of homes were selling for below asking, 37 per cent netted sellers more than they asked for, and four per cent sold as-listed.

Some neighbourhoods have more underbidding activity than others.

Out of the 272 neighbourhoods where at least five homes sold in August, 89 per cent (242) were in underbidding territory, up from 82 per cent (227) in July.

The top underbidding neighbourhood in August was Eastlake in Oakville. Mississauga’s Port Credit neighbourhood also made the top five list.

Overbidding neighbourhoods were mainly to the north and east of downtown Toronto.

Wahi determines the overbid and underbid status of the GTA by comparing the differences between median list and sold prices.

Neighbourhoods with fewer than five transactions are excluded.

A total of 272 neighbourhoods out of the GTA’s approximately 400 met this threshold in August, down from 276 in July.

Data is sourced from Information Technology Systems Ontario and the Toronto Regional Real Estate Board.

See the full report here.

Lead photo: RDNE Stock project