Ontario Housing Sales "Above Asking," a Thing of the Past?

Since the start of the Covid-19 Pandemic, home buyers have been frustrated by opaque bidding wars and a lack of market price transparency. Homes regularly transacted well in excess of listing prices and buyers were left confused and deflated. According to Konfdis’ analysis of detailed MLS transaction-level data and comparing sold prices to listing prices at the time of sale, at the beginning of the year, average sale price premiums to list price for detached homes shot up as high as 14% in Toronto and as high as 34% in secondary markets east of the GTA including Oshawa, Whitby, and Clarington. That trend has since evaporated. In recent weeks, Toronto home sale prices have dropped to only a 1% premium compared to listing price, and Oshawa, Whitby, and Clarington have sharply reduced to 4-6% (see Table 1 below).


This trend has created opportunities for resourceful buyers. Buyers now benefit from greater clarity on the price sellers are actually willing to accept, with few sellers listing their homes well below market prices to create bidding wars – a strategy that left many buyers frustrated and a lot of time and effort wasted. There has also been a significant increase in listings not selling through bid dates and sellers agreeing to conditional sales – two trends the buyers could only dream of several months ago.


The last time the housing market saw a spike in sale to list price premiums was in early 2017 when buyers rushed to lock-in new mortgages and tie up homes prior to the implementation of higher "stress test" rules for mortgage qualifications. Following that spike, sale prices trended slightly below listing prices for several years leading up to early 2020 (see Table 2 below).


Source: Konfidis.com from actual MLS listings and transactions, computed on a trailing 30-day basis. For detached homes only.


Source: MLS Survey data - Toronto Regional Real Estate Board (TRREB) Market Watch, monthly reports. For detached homes only.


Konfidis is dedicated to surfacing data-bolstered market trends for real estate investors. We are looking forward to continuing to follow this trend and sharing additional data on similar indicators such as listing cancellations and repricings. Stay tuned.