Overbidding has returned to these real estate markets in Ontario
Published March 6, 2024 at 3:23 pm
Overbidding has returned to many neighbourhoods in Ontario, particularly in the GTA.
After a lull in the real estate market, dozens of GTA neighbourhoods entered overbidding territory last month, according to digital real estate platform Wahi’s latest monthly Market Pulse Report.
In February, a total of 76 neighbourhoods (25.1 per cent) were in overbidding territory, up from none in January, according to Wahi.
That’s not to say the occasional home didn’t sell for over the asking price. A modest-looking semi-detached home in Mississauga made headlines in January after it received 85 offers and sold for more than $250,000 over the asking price.
In February, 17 (5.6 per cent) GTA neighbourhoods were selling at-asking, and 210 (69.3 per cent) were in underbid territory.
The last time the GTA saw any neighbourhoods in overbidding territory was November 2023, when there were 16, according to Wahi. The real estate market usually slows during the winter season.
Videos
“While the start of the year was defined by nearly all of the GTA’s neighbourhoods being in underbidding territory, we were still seeing bidding wars break out at specific price points, particularly for houses listed below $1 million,” says Wahi CEO Benjy Katchen.
“Some homes in this price range have been getting a lot of attention, occasionally selling for several hundred thousand over asking — and attracting up to 60 or more offers — even if the overall market trend was one of underbidding.”
At the end of each month, Wahi compares the differences between median list and sold prices to determine whether a neighbourhood is in overbidding or underbidding territory, excluding those neighbourhoods with fewer than five transactions in a given month.
A total of 303 neighbourhoods met this criterion last month. The top overbidding and underbidding neighbourhoods are ranked by the median overbid or underbid amount.
Last month’s top overbidding neighbourhoods were scattered across the region, including parts of Ajax, Brampton, Markham, Pickering and the City of Toronto, the report notes.
These are the top overbidding neighbourhoods:
The neighbourhoods where people are bidding less on homes tend to be in places where the housing prices are high, according to Wahi.
These are the top underbidding neighbourhoods:
When looking only at condo transactions, just 10 neighbourhoods, or 7.3 per cent, were in overbidding territory in February, albeit up from zero in January.
An additional six (4.4 per cent) were selling at the asking price and 122 (88.4 per cent) remained in underbidding territory. Seven of the 10 overbidding neighbourhoods for condos were located within the City of Toronto, while two were found in Brampton, and one in Markham.
For comparison, the non-condo segment saw 88 neighbourhoods in overbidding territory, also up from zero in the previous month.
This suggests that the market for houses — including detached, semi-detached houses as well as row and townhomes — in the GTA remains considerably more competitive.
“Both the condo and non-condo corners of the market are showing signs of heating up, but for now, it appears condo buyers are less likely to face a serious bidding war,” says Katchen.
For more, see the Wahi reports here.
Lead photo: RDNE Stock project
insauga's Editorial Standards and Policies advertising