The Greater Toronto Area’s (GTA) housing market continued to slip deeper into underbidding territory in May despite this time of year normally being one of the busiest for homebuying activity.
So suggests Canadian digital real estate platform Wahi’s latest Market Pulse report, which found home prices were bid down in 87 per cent of GTA neighbourhoods, up from 84 per cent in April. In the remaining 13 per cent of neighbourhoods, sale prices surpassed list prices. A year ago, 60 per cent of neighbourhoods were in underbidding territory, 36 per cent were overbid, and 4 per cent were selling at asking. Neighbourhoods with fewer than five sales during the month were excluded from the analysis.
“Many homebuyers are negotiating lower prices in the GTA today, but that doesn’t necessarily mean properties are selling for below market value,” notes Wahi CEO Benjy Katchen. “Some sellers have been slow to adjust their expectations from when the market was booming and continue to list too high,” he explains.
In general, the single-family home segment has held up considerably better than the condo market. However, the single-family segment is showing increased signs of softening.
Counting only condo sales, 98 per cent of GTA neighbourhoods were underbid in May compared to 97 per cent last month and 89 per cent in April 2024. Meanwhile, for single-family homes, the share of neighbourhoods in underbidding territory was 79 per cent, up from April (76 per cent) and a year ago (44 per cent).
Overall, 68 per cent of all homes that sold in the month of May, regardless of the neighbourhood, changed hands for less than the list price, up one percentage point from April. The uptick is due to more single-family homes selling below asking. While the share of condos selling below asking remained steady at 78 per cent in May, it increased to 64 per cent for single-family homes, up from 61 per cent in April.
The most underbid neighbourhoods were distributed across three regions, including the City of Toronto as well as York and Halton regions, respectively. Three were carryovers from April: Lawrence Park, York Mills, and Eastlake. Eastlake has placed in the top five for underbidding more than any other neighbourhood in the GTA. In 2024, it landed in the top five for nine consecutive months.
One local REALTOR® said the prevalence of newer custom homes, which can be more difficult to price, contributes to more homes selling for below asking in Eastlake. Because neighbourhoods are ranked by the median underbid amount in dollars, those areas with higher price points are most likely to enter the top five. All but one of the top underbidding neighbourhoods had a median price above the $2-million mark.
Once again, four of the most overbid neighbourhoods in the GTA were found within the City of Toronto. In recent months, the top overbidding neighbourhoods have been increasingly concentrated in the city. March was the first time since Wahi began tracking bidding competition in July of 2022 that each of the top five overbidding neighbourhoods were in Toronto proper. Since then, the majority of leading overbidding neighbourhoods have been in the 416 area code.