Homes are selling for over asking in these 5 Greater Toronto Area neighbourhoods

Overbidding on homes was near an all-time low in the Greater Toronto Area last month, but there were still neighbourhoods where properties sell for over the asking price.

Homes in certain types of neighbourhoods gain multiple offers, according to a new report from digital real estate platform Wahi.

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 306 neighbourhoods out of the GTA’s approximately 400 met this threshold in June, up from 303 in May.

Wahi said bidding activity edged lower once again in June — and it sits near the all-time lows since the real estate company began tracking the market in July of 2022.

In June, just six per cent of the 306 GTA neighbourhoods in which at least five resale homes changed hands were in overbidding territory last month, down from seven per cent of the 303 neighbourhoods that met the sales minimum in May, Wahi found.

The overwhelming majority of neighbourhoods, 93 per cent, were in underbidding territory this June, and a handful of others, one per cent, were selling at asking, Wahi said.

The five neighbourhoods where overbidding occurs are generally older, more established ones situated within the borders of the Old City of Toronto — especially those in the east end. In June, Riverdale topped the list for the second consecutive month.

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.

Wahi notes that a variety of factors can influence bidding trends, from seasonality to selling strategies. In some cases, realtors may be more likely to price a home below market value in hopes of attracting multiple offers.

For the third straight month, Lawrence Park maintained the crown for most underbid neighbourhood, Wahi said. The remaining four other neighbourhoods were scattered across the northern sections of Toronto, as well as Mississauga and Brampton.

Wahi suggests overbidding on homes could increase soon.

“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.

With new listings also hitting a multi-year low for June, McLaughlin notes that a continued decline in supply could eventually influence prices, though buyers currently have more room to negotiate, especially in the condo segment.

See the full report here.