Homebuyer competition in the Greater Toronto Area is nearing a multi-year low, but a pullback in listings suggests conditions may shift in the short-to-medium term.
The GTA’s real estate market continues to present conditions that heavily favour homebuyers as the level of bidding competition approaches a multi-year low, suggests new analysis from digital real estate platform Wahi.
In June, just 6 per cent of the 306 GTA neighbourhoods in which at least five resale homes changed hands were in overbidding territory last month, down from 7 per cent of the 303 neighbourhoods that met the sales minimum in May. The overwhelming majority of neighbourhoods (93 per cent) were in underbidding territory this June, and a handful of others (1 per cent) were selling at asking. During the same month last year, 5 per cent (289 neighbourhoods) saw prices bid higher.
This is based on comprehensive analysis of list and sold prices for all homes that changed hands on the resale market last month, including condos and single-family properties.
“While the scales are very much tipped in favour of homebuyers across most GTA neighbourhoods, there are some signs that could spark a bit more competition in the coming months,” says Wahi Economist Ryan McLaughlin.
The number of new listings in the GTA in June also reached a multi-year low for the month, driven by ongoing weakness in the condo segment. “If we continue to see fewer homes coming on the market in the coming months, that could begin to affect supply and, eventually, prices,” McLaughlin continues. “However, with the summer slowdown setting in, homebuyers do have more time right now to negotiate lower prices, particularly for condos,” he adds.
Indeed, bidding competition for condos is almost non-existent. Across all of the 123 GTA neighbourhoods with a minimum of five condo transactions, only one (Lasalle, in Burlington) was in overbidding territory this June. Overall, 98 per cent of neighbourhoods were underbid when only looking at condo sales. For comparison, 88 per cent of the 259 neighbourhoods with at least five single-family home sales were underbid, while 11 per cent (29 neighbourhoods) landed in overbidding territory and 1 per cent (3 neighbourhoods) were selling at-asking. Single-family homes include detached and semi-detached homes as well as row and townhomes (without maintenance fees).
To gauge overall market conditions in June, Wahi also analyzed the share of all listings — regardless of neighbourhood — that sold for more than asking, less than asking, or for the list price. Nearly three-quarters (74 per cent) of all homes sold for less than the list price in the GTA last month, a marginal increase from a year ago (72 per cent). That’s also a slight uptake from this May (73 per cent).
Some Old Toronto Neighbourhoods Attract Multiple Offers
Although bidding activity edged lower once again in June — and it sits near the all-time lows since Wahi began tracking the market in July of 2022 — certain types of neighbourhoods have still seen listings attract multiple offers with some regularity.
These neighbourhoods have generally been older, more established ones situated within the borders of the Old City of Toronto — especially those in the east end. This was true of the top five overbidding neighbourhoods in June, led by Riverdale for the second consecutive month.
Note that a variety of factors can influence bidding trends, from seasonality to selling strategies. For instance, in some cases, realtors may be more likely to price a home below market value in hopes of attracting multiple offers.
In addition to sharing similar location characteristics, the top overbidding neighbourhoods also saw homes sell for considerably less than the leading underbidding neighbourhoods. Median sale prices in overbidding neighbourhoods all fell within the $1-1.5 million range, versus the top underbidding neighbourhoods, where median sale prices ranged from $1.5 million to north of $4 million.
For the third straight month, Lawrence Park maintained the crown for most underbid neighbourhood. The remaining four other neighbourhoods were scattered across the northern sections of Toronto, as well as Mississauga and Brampton.
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