82% of homes selling for under the asking price in Mississauga, Oakville and the GTA

A cooler real estate market is leading to more homes selling for under the asking price across the GTA.

Home prices and sales declined this summer across much of the GTA.

In Mississauga, prices dropped 5.5 per cent from June 2024 to July 2024, falling to an average (all home types combined) of $1,042,868.

Halton Region saw sales decrease by 17.6 per cent month-over-month in July, with 543 homes sold, while new listings fell by 11.8 per cent, month-over-month. The average sales price stayed fairly consistent, decreasing by just 0.5 per cent, to $1,246,352.

And Brampton had one of the most “significant declines” with an average sale price of just over $1,010,000 in July.

So it may come as no surprise that many buyers are underbidding for properties across the GTA.

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Digital real estate platform Wahi’s July 2024 Market Pulse Report found bidding competition among Greater Toronto Area homebuyers in July eased for the fourth straight month.

Across 300 neighbourhoods where there were at least five home sales last month, only 14 per cent were in overbidding territory, down from 27 per cent in June, Wahi says in the report. An additional four per cent were selling at asking, while people underbid on 82 per cent of properties.

“The spring selling season that never was has been followed by a slower-than-usual summer,” says Wahi CEO Benjy Katchen.

However, Katchen notes that homebuyers have choices as there are almost 10,000 more active listings on the market than a year ago.

“This is helping more buyers negotiate better deals and purchase homes below-asking,” he says.

Single-family homes continue to attract more attention than condos. When only looking at single-family homes, 23 per cent of neighbourhoods were overbid, compared to six per cent for condos, the report says.

However, the gap between the two segments is rapidly shrinking, as June saw 39 per cent of neighbourhoods bid up for single-family homes, while condos were at seven per cent.

Three of the top five overbidding neighbourhoods in July were in Toronto.

Wahi notes that when a neighbourhood is in overbidding territory, it doesn’t necessarily mean that every home is selling above the asking price. 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.

Oakville’s Eastlake neighbourhood made the top five for underbidding again this month. It is the only carryover from June’s top five, Wahi says.

Wahi calculates the underbidding and overbidding neighbourhoods by comparing the differences between median list and sold prices, excluding those neighbourhoods with fewer than five transactions in a given month.

The top overbidding and underbidding neighbourhoods are ranked by the median overbid or underbid amount.
A total of 300 neighbourhoods out of the GTA’s approximately 400 met this threshold in July, unchanged from June.

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

See the full report from Wahi here.