In the final month of 2023, underbidding activity in the Greater Toronto Area’s housing market reached unprecedented levels, according to new analysis from Wahi.

In December, a staggering 98% of GTA neighbourhoods were in underbidding territory, up from 93% in November. This is the seventh consecutive month that the share of underbidding neighbourhoods has increased. It also represents the highest share of underbidding neighbourhoods recorded since Wahi began tracking bidding activity in July of 2022.

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. The top overbidding and underbidding neighbourhoods are ranked by the median overbid or underbid amount. This is calculated by subtracting the sold price from the list price of each individual listing in a given neighbourhood. These are then ranked by the median of all subtractions and presented as the median overbid or underbid amount.

Based on these criteria, only 122 of the GTA’s approximately 400 neighbourhoods were evaluated as many areas didn’t see sufficient sales activity. Nearly all of these neighbourhoods (120) were in underbidding territory, and two were selling at-asking: Pine Valley Business Park, in Vaughan, and Woodbine Gardens, in Toronto. No neighbourhoods were in overbidding territory, down from 16 in November. These bidding trends are an indicator of where a higher concentration of homes may be selling above or below asking.

“The Bank of Canada’s rate hikes last year are clearly having an impact on real estate markets across southern Ontario,” says Wahi CEO Benjy Katchen. “That said, with interest rates recently stabilizing or in some cases even falling, now could be a great time to potentially purchase a home due to having a greater selection of properties for sale and potentially being able to cut a sharper deal than even just a few months ago,” Katchen continues.

As in previous months, the top underbidding neighbourhoods were generally located within more expensive areas, although there was one exception this month in East Woodbridge, Vaughan:

Rank	Neighbourhood	Median underbid amount	Median sale price
1	Old Oakville	-$449,000	$3,550,000
2	Eastlake, Oakville	-$250,000	$3,900,000
3	The Annex, Toronto	-$145,000	$1,750,000
4	East Woodbridge, Vaughan	-$128,000	$1,100,000
5	Deer Park, Toronto	$123,500	$1,989,000

Note that seasonal factors can influence bidding activity. For example, with more limited competition during the winter months, bidding wars may be less likely. Seller behaviour can also have an impact, such as if a home is listed below its true value in hopes of sparking a bidding war. 

The GTA-wide median underbid amount was $24,900 in December. With the highest home prices in the province, it’s no surprise that the region had the highest underbid amount of the major Ontario housing markets Wahi tracks. However, when comparing the median underbid amount as a percentage of the median sold price, several cities saw comparable underbidding to the GTA.

Rank	Market	Median Sold Price	Underbid%
1	GTA	$911,800	-3%
2	Hamilton	$645,000	-3%
	London	$582,500	-3%
	Waterloo	$675,000	-3%
3	Barrie	$672,500	-3%
4	St. Catharines	$520,000	-3%
5	Kingston	$550,000	-3%

To see up-to-the-minute analysis of the GTA market, check out Wahi’s Market Pulse tool, an interactive tool that maps out where bidding activity is strongest and weakest based on the latest available data at any point in the month. 

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