Underbidding on homes most common in these Mississauga and Oakville neighbourhoods

Most homes are selling for below the asking price despite some increased activity in the Greater Toronto Area.

For the first time since March, the share of GTA neighbourhoods in overbidding territory increased as competition for single-family homes started to simmer, according to the latest report from digital real estate platform Wahi.

In September, 13 per cent of 284 GTA neighbourhoods that had at least five home sales during the month were in overbidding territory, up from eight per cent the previous month, Wahi found.

Another one per cent of neighbourhoods were selling at the asking price in September, the report found.

However, the vast majority, 86 per cent, remained in underbidding territory.

“With the start of the historically busier fall real estate market, stronger competition is expected,” says Wahi CEO Benjy Katchen. “However, we’re still seeing transaction levels and bidding activity well below last year’s level for this time of year.”

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Last September, 24 per cent of GTA neighbourhoods were in overbidding territory, with an additional three per cent selling at-asking.

When only looking at condos, five per cent of neighbourhoods with at least five condo sales were overbid last month, compared to eight per cent in August and 10 per cent in September 2023.

For single-family homes, nearly one-in-five neighbourhoods (18 per cent) saw prices bid up, an increase from 13 per cent the previous month but nowhere near last year’s level (35 per cent).

Wahi also tracks the percentage of homes that sell for less than they are listed for. Overall, 69 per cent of homes of all types that sold in September were purchased for below the asking price, down from 70 per cent the previous month.

When looking at which neighbourhoods have the most underbidding activity, three are in Toronto, one in Mississauga and one in Oakville.

After 15 straight months in the top five, the Oakville neighbourhood of Eastlake was not among the GTA’s top five underbidding neighbourhoods in September.

Meanwhile, Toronto neighbourhoods accounted for four of the top five overbidding neighbourhoods, led by St. Clair West, in Toronto.

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

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 284 neighbourhoods out of the GTA’s approximately 400 met this threshold in September, down from 272 in August. Data is sourced from Information Technology Systems Ontario and the Toronto Regional Real Estate Board.

For more information see the full Wahi report here.

Lead photo: Kindel Media