92% of Toronto homes were sold below asking price in March. Here’s what that means for buyers

As the real-estate market continues to slow down in Toronto, buyers now have an opportunity to negotiate prices and closing terms. 

A report by Wahi revealed that although uncertainty from shifting global economic policies decreases, the market is not picking up the pace in Toronto. 

In March, only six per cent of homes sold across 213 Greater Toronto Area (GTA) neighbourhoods with a minimum of five sales were negotiated for more than their asking price. The number is a one per cent drop from February, when 238 neighbourhoods reached the sales minimum and seven per cent went through overbidding. 

On top of having declined month-to-month, home overbidding has significantly dropped from last year at this time, when 20 per cent of GTA homes were sold for more than their asking price. According to the report, this marks the weakest month for homebuyer competition in four years. 

With the market slowing down in March, 92 per cent of home sales across the region were sold below their asking price, while only two per cent were sold at-asking.

According to the report, while economic uncertainty seems to be decreasing, conflicts in the Middle East might have been slowing things down.  

“Add to that the unseasonably cold weather to start spring and challenging-albeit-improved affordability, and there’s a recipe for subdued housing activity,” Wahi Economist Ryan McLaughlin explained in the report. 

According to the report, several neighbourhoods, including many east-end areas, were negotiated below their asking price, with the top ones for underbidding being: 

• Rosedale, in Toronto, with the median underbidding amount at $177,459 under the asking price;
• Mineola, in Mississauga, with the median underbidding amount at $143,500 under the asking price;
• Forest Hill, in Toronto, with the median underbidding amount at $142,500 under the asking price;
• Neighbourhood of King, in King, with the median underbidding amount at $140,000 under the asking price;
• Summerhill, in Toronto, with the median underbidding amount at $138,000 under the asking price.

Meanwhile, the region’s west-end neighbourhoods were ranked top for overbidding, including: 

• Runnymede, in York, with the median overbidding amount at $196,500 over the asking price;
• Bloor West Village, in Toronto, with the median overbidding amount at $107,000 over the asking price;
• Riverdale, in Toronto, with the median overbidding amount at $99,000 over the asking price;
• Rouge Woods, in Richmond Hill, with the median overbidding amount at $91,000 over the asking price;
• Trinity Bellwoods, in Toronto, with the median overbidding amount at $87,100 over the asking price. 

What does this mean for buyers?

Toronto-based realtor Shay Asnani tells Now Toronto that the current market offers opportunities for buyers who had been previously priced out to finally get their foot in the door, as average home prices are decreasing in the GTA. 

“There was a couple I was working with back in 2021, 2022, when the market was really hot, and they just got priced out and decided that they were going to rent instead of buying. And they actually just reached out to me yesterday, saying, ‘Hey, with where the market is at right now, we’re ready to pick up this conversation… And that’s happened to me with a few clients, actually,” Asnani said. 

As seen in the Wahi report, Asnani explained that the fact that the market has been slower and there are plenty of properties out for sale also gives these buyers the opportunity to further negotiate and get these prices down. 

The realtor says that he has worked with buyers that were able to successfully negotiate prices down as much as $100,000 below the original asking price, while others were able to negotiate about $20,000–$40,000.

“I think it’s commonly understood that it’s not the best time to be selling, it’s not the strongest market for a seller right now. And so there’s opportunity, because the people [who] are selling, they need to sell. So, for a first-time homebuyer, I think it’s a great opportunity to get a house for a price that’s maybe as much as 20 per cent less than it would have been a couple years ago,” he said. 

In addition to prices, Asnani says buyers could also negotiate other offer conditions for properties under the current market, including their closing date, home inspections, or other financial conditions. 

While in previous markets when sales were up and bidding wars had become the norm, sellers were often able to deny these conditions, now buyers have higher chances of getting them approved, and avoid any unpleasant surprises. 

“A buyer should be able to confirm their financing and have a home inspection so they know what they’re buying and that so that there’s no surprises for them later, because they’re already making such a huge investment. I mean, for most people, this is the biggest purchase that they’re going to make in their life, and so it’s really important to know what you’re going to be buying and do it in a safe way,” he said.