Buyers are still offering way under asking price for homes in most parts of Toronto area

The number of homes changing hands in the Toronto area is finally creeping back up after many months of ghastly sales figures, but it seems that buyers still have more of an upper hand than they have in years when it comes to price.

As of October, the vast majority of the region is still in "underbidding territory," with prices for all housing types — especially condos — also down slightly across the board compared to the same time last year.

Real estate listing site Wahi, which collects the stats on bidding wars and sales prices each month, cites a 7 per cent year-over-year and 2 per cent month-over-month increase in the proportion of neighbourhoods where most buyers are successfully offering under asking price for a home.

This amounts to 88 per cent of the GTA that is now being underbid when looking geographically, while 70 per cent of homes sold over the course of the month regardless of address went for less than sellers had been hoping to get — up one per cent from September.

Despite these data points, the firm notes that there have been some "early signs" that prospective buyers are ready to re-enter the market again amid lower interest rates and more transactions.

Among these is the fact that alongside the marginal increases in underbidding over recent months, there has been a parallel uptick in overbidding, too, particularly in September.

"Despite a decline in bidding activity in the GTA, the housing market has shown recent signs of possible green shoots. September marked the first ramp-up in bidding activity since March. Perhaps most notably, monthly home sales climbed on a month-over-month basis in both September and October for the first time since 2020," Wahi's experts write.

"The real test will be next year’s spring market, as it's still too early to tell what the cumulative effects of the Bank of Canada's rate cuts will be."

Chart of most underbid neighbourhoods in the GTA in October, by dollar amount, from Wahi.

Based on last month's data, the pockets where buyers are most likely to get the biggest dollar amount savings are York Mills in North York, underbid by $246,000, on average; Mineola in Mississauga, underbid by about $151,925; Eastlake in Oakville, underbid by $145,900; Lawrence Park in Old Toronto, underbid by $145,000, on average; and North York's Ledbury Park, underbid by $138,500.

Conversely, the neighbourhoods where owners are most likely to get more money for their properties are Toronto's Wychwood Park, where homes are now overbid by an average of $85,500; Markham's Milliken Mills West and Milliken Mills West, overbid by medians of $76,000 and $73,000; Scarborough's Bridlewood, where houses are overbid by around $63,050, and Markham's Raymerville, overbid by $60,005.

Chart of most overbid neighbourhoods in the GTA in October, by dollar amount, from Wahi.

One may think that with so little buyer interest over the last year or so, such an astounding supply of homes sitting on the market for longer (even as builders drastically slow down) and other major signs of softening, we'd be seeing far bigger price declines.

Unfortunately, with most stakeholders expecting the market to only trend upwards after the recent lull, we may be in a time of the most negotiating power and cheapest prices buyers will be able to nab.