The rate at which the Toronto home sales are declining is very alarming and one real estate agent sees a 40% housing correction taking place in the Canadian real estate market.
The Toronto housing market which is presently the hottest housing market in Canadian took a turn in sales activity following the introduction of 15% Tax on foreign investors. Home sales dropped by 20% in the awake of the tax while new home listings were on the increase of close to 50% in the Greater Toronto Area in May.
Additionally, John Pasalis, president and agent at Realosophy stated that this downward trend is expected to continue into June.
It is amazing how people have decided to stay out of the market says Pasalis. But just as the situation happened in Vancouver, many home buyers are uncertain of the implications of the tax hence they are waiting a bit to see what to expect.
Many people are driven by the market trend and as of now, no one is sure of what will come next.
According to a survey done by Realosophy, for the time being, sales of freehold properties in the GTA have dropped by 39% with sales in the first week in June dropping by 44%.
On the other hand, new listings for new freehold homes increased in June by 34%.
In the last four weeks, Pasalis noted that the growth rate for new listings has been on the decline and he has more concerns over the significant drop in home sales than new listings.
The condo market however made a recovery according to reports from Realosophy there was an 11% increase in new listings in June.
Interestingly, the market activity across the GTA is not the same and the decline was mostly seen in key communities such as Markham and Richmond Hill.