80% of Toronto-area, Canada homes are selling below asking price

The Greater Toronto Area (GTA) real estate market is facing significant turmoil, with an oversupply of homes and properties selling at considerable losses. A new report from real estate listing platform Wahi reveals that most neighborhoods in and around Toronto are seeing homes sell for less than the asking price, with underbidding becoming a widespread trend.

Wahi's July 2024 Market Pulse Report shows that bidding on homes in the GTA has cooled for the fourth consecutive month. This slowdown has persisted despite the Bank of Canada's second interest rate cut this year.

The report analyzed 300 neighborhoods where at least five home sales occurred in July and found that only 14% of areas experienced overbidding, down from 27% in June. In just 4% of these neighborhoods, homes sold at the asking price, while a striking 82% of sales were underbids.

"The spring selling season that never materialized has been followed by a slower-than-usual summer," said Wahi CEO Benjy Katchen.

Despite the market's sluggishness, Katchen pointed out that the abundance of listings — over 10,000 more than this time last year — is allowing buyers to negotiate better deals and purchase homes below asking price.

Summer is typically slower for home sales, but 2024's summer has been notably weak when compared to previous years. Fewer than 5,000 homes were sold across the region in July, a 12% drop from the year prior. Additionally, the average time a home spent on the market increased from 17 days in July 2023 to 24 days in July 2024.

Overbidding on homes has become rare, with only 4% of homes selling above the asking price — the lowest rate since January when no neighborhoods saw overbidding. This marks a stark contrast to July 2023, when 38% of Toronto neighborhoods were experiencing overbidding.