Canada has seen its principal monthly drop in home sales in about 5 years, as it registered a 6% decline in home sales during the month of May, compared to the previous month. Although the prices are still higher than they were last year.
The enormous drop in Toronto was mainly accountable for the 6.2% drop in home sales documented last month by Canada, as the number of homes sold in Toronto fell by more than a quarter, the Canadian Real Estate Association said on Thursday.
May usually records an important number of home sales as buyers take to the outdoors after the winter.
The month-over-month decline occurred following the notice made by Ontario concerning new regulations aimed at cooling the housing market. A 15% non-resident buyer’s tax is among the chief measures that were employed.
“Latest modifications to housing policy in Ontario have quickly caused sales and listings to become more balanced in the GTA,” CREA president Andrew Peck said.
Though BMO economist Sal Guatieri said the sales decline in Ontario is likely to be just a minor aberration that may not continue after the new regulations are fully sorted out by the market.
“This merely returned sales to some likeness of normalcy after a frenzied winter,” he said. “The Ontario government’s policies have temporarily returned the Toronto and Greater Golden Horseshoe housing situation from a raging seller’s market to a more balanced playing field for now.”
At the same time, home prices carry on to surge on a twelve-monthly basis, even though they were lower in May than they were in April.
The average cost of a house in Canada sold on the Multiple Listing Service (MLS) was $530,304 in May, a 4.3% increase in comparison to the previous year, but down more than 5% on seasonally attuned basis from April’s level.