Following the introduction of new real estate regulations by the Ontario government, it was hopeful that new listings would be high in May but the rate of housing construction declined beyond expectation.
On Thursday, the Canada Mortgage and Housing Corporation in a release noted there was a decline in new home construction from 213,498 in April to 194,663 in May even though housing experts and economists had been hoping for the figure to be around 205,000.
Housing statistics in Toronto according to Benjamin Reitzes, the Canadian rates and macro strategist at BMO Capital Markets dropped by 44.4% from April.
He went on to suggest that the city should be prepared to witness a decline in the pace of construction as the real market comes in term with the newly introduced real estate regulations.
Earlier in April, the Ontario government introduced several new measures that are geared towards making housing affordable for local investors. Among the new measures taken was the 15% tax on foreign investors and also putting new measures on rentals.
Following the announcement, the effects of the measures taken was reflected in the figures for May as home sales declined by 20.3% which in comparison to the previous year was lower.
Previous home listed in the market helped to ease the tension for the demand for new homes as buyers have varied options to choose from.
Alongside the decline in Canadian new listings, urban figures also saw a decline of 10.2% to 178,518. Single-detached urban figures also declined to 59,824 by 8.9% while multiple-unit urban figures also recorded a drop of 10.8% to 118,694.
However according to TD Bank senior economist Michael Dolega the slow pace of home construction in Ontario is well balanced by the construction of homes in other leading real estate regions.
Dolega went on to add that the pace of new home construction is expected to maintain a steady growth rate and edge towards 200,000 during the course of the year.