70% of homes still selling for below list price in GTA, Ontario
Published November 8, 2024 at 1:00 pm
Most homes in the Greater Toronto Area are selling for under the list price, a new report finds.
While the latest real estate numbers show sales activity increasing in October, overbidding activity remains low in the GTA.
The Toronto Regional Real Estate Board showed increases in sales and prices in many areas in October. In Mississauga, the average home price increased 3.2 per cent to $1,081,951 and sales were up 27 per cent.
Monthly home sales climbed in the GTA 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, according to digital real estate platform Wahi.
Experts believe Bank of Canada rate cuts are behind the increased sales activity.
“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.”
October saw many buyers get homes for below the asking price.
Some 70 per cent of all homes that changed hands across the GTA in October sold for less than the seller’s asking price, according to Wahi’s report.
Overall, 88 per cent of GTA neighbourhoods with at least five home sales in October were in underbidding territory last month. That’s roughly flat from September — when 86 per cent of neighbourhoods were underbid — but up seven percentage points compared to a year ago (81 per cent), the report states.
Top five underbidding neighbourhoods in October 2024
The top five neighbourhoods for underbidding were once again concentrated in upscale neighbourhoods, including in Mississauga and Oakville, with price points between $2 million and upwards of $4 million.
The Oakville neighbourhood of Eastlake returned 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 neighbourhood. 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.
Top five GTA overbidding neighbourhoods in October 2024
The most overbid neighbourhoods were priced in the low- to mid-$1 million range, with three entries in Toronto and two in Markham.
Wahi notes that underbidding and overbidding measures can be influenced by seasonal factors and low list prices in hopes of sparking a bidding war. Competition may decline as the quieter winter months approach.
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 and the Toronto Regional Real Estate Board.
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.
See the full report here.
INsauga's Editorial Standards and Policies