The Toronto Real Estate Board said there has been a decline in sales through the Multiple Listing Service last month, from 12,790 sales reported in May 2016 to 10,196. This represent a 20.3 per cent decline from a year ago while the average home price in the region fell about 6 per cent from April according to the results from the first full month of data following a major initiative by the Ontario government to cool Canada’s biggest housing market.
Detached home sales fell 26.3 per cent during this period and condominium apartment sales were off 6.4 per cent.
Such decline has never occurred in the Toronto home market since the recession of 2008.
The director of market analysis with TREB, Jason Mercer said in a statement: “the actual or normalized effect of the Ontario Fair Housing Plan remains to be seen. In the past, some housing policy changes have initially led to an overreaction on the part of homeowners and buyers, which later balanced out”.
On April 20, the Ontario government announced 16 measures aimed at cooling the housing market. Among those measures were a 15 per cent non-resident speculation tax and expansion of rent controls that limit annual increases, that as suggested by some commentators could cool the appetite of investors looking for income properties.
There has been a 14.9 per cent increase in the average price of a home from a year ago. But the May figure ($863910) for the GTA compared with that of April ($920791) shows a 6.2 per cent drop.
The number of properties available for sale also known as the “active listings” rose 42.9 per cent in May from a year ago, but the board pointed May 2016 as the lowest record.
“The increase in active listings suggests that homeowners, after a protracted delay, are starting to react to the strong price growth we’ve experienced over the past year by listing their home for sale to take advantage of these equity gains”, Mercer said.
After what appeared to have been the peak of the housing market in the GTA: the 33 per cent increase on a year-over-year basis in March prices, the province came out with its rule changes.
Christopher Alexander, Regional Director, RE/MAX INTEGRA Ontario-Atlantic Canada Region, said in an interview his company has noticed “a flood of new listings” to hit the market, but said they are selling just not as quickly as from January from April.
He suggested that this could be similar to what happened in Vancouver as prices and sales start to rise again after the province implemented a 15 per cent tax on foreign buyers in August 2016.
Larry Cerqua, president of the board said in a statement that home buyers definitely benefited from a better supplied market in May, both in comparison to the same time last year and to the first four months of 2017.