With the sales-to-new-listings ratio slipping below 30%, September marked a return to buyers’ market territory in the Greater Toronto Area, and the effects were clear across the lion’s share of neighbourhoods.
In fact, a new report from Wahi reveals that 74% of GTA neighbourhoods — that's 209 neighbourhoods — slipped into “underbidding territory” last month “as higher interest rates and inflation are reducing competition among homebuyers.”
The prop-tech company says that fall is typically when bidding activity “heats up.” However, this year, just 67 neighbourhoods were in “overbidding territory.” This suggests that most homebuyers are nabbing properties below the asking price.
“When a neighbourhood is in underbidding territory, it can signal less competition between homebuyers. However, other market conditions, such as seasonal factors or realtors listing homes for unrealistically high prices, can also have an influence,” the report also notes.
Top neighbourhoods for underbidding in the GTA. (Wahi)
“The top underbidding neighbourhoods this year have typically been more expensive, while the top overbidding neighbourhoods have tended to be neighbourhoods with lower home prices,” says Wahi Founder and CEO, Benjy Katchen, adding that this is a trend that proved to be true in September.
The report highlights that the top GTA neighbourhoods for underbidding “are known for multi-million-dollar houses and evenly split between Oakville and Toronto proper, with one Markham neighbourhood also joining the top five.”
It also reveals that, while the number of neighbourhoods in underbidding territory has been on the rise since June, there are signs that the trend is easing.
“For example, between July and August, the share of underbidding neighbourhoods surged from 57% to 71%, whereas September saw a comparatively small month-over-month increase.”
Top neighbourhoods for overbidding in the GTA. (Wahi)
In spite of the fact that it’s a challenging time to purchase real estate, Wahi reports that there were still “dozens” of GTA neighbourhoods where homebuyers paid over asking.
”And, in three neighbourhoods in particular, there were double-digit increases between median list and sold prices,” says the report. “Note that in some cases, this could be a function of sellers listing their homes below value to attract more attention.”