In Ottawa last month, home sales dropped drastically, driven by a dive in the GTA after the government of Ontario imposed a tax on foreign buyers to cool the red-hot market.
The number of residential properties sold across the nation reduced by 6.2 per cent in May compared to April, the largest month-to-month decline in about 5 years, as announced by the Canadian Real Estate Association. The industry, that groups real estate agents noted that sales had drop by a pointedly 25.3 per cent month-over-month in the GTA.
According to the data, though real estate may be local, the impact of changes in the Toronto market may affect the whole nation.
“This is the first full month of results since changes to Ontario housing policy made in late April. They provide clear evidence that the changes have resulted in more balanced housing markets throughout the Greater Golden Horseshoe region”, CREA chief economist Gregory Klump said in a statement.
“For housing markets in the region, May sales activity was down most in the GTA and Oakville. This suggests the changes have squelched speculative home purchases”.
In order to cool down Toronto’s hot housing market, the Ontario government introduced more than a dozen measures, including a 15 per cent tax on foreign buyers. Prices have gone out of reach for many prospective buyers both in and on the outskirts of the city.
In the closely monitored Vancouver market, sales were up by 22.8 per cent month-over-month. There are concerns that the city may be returning to bubble territory less than a year after the British Columbia government instituted a tax on foreign buyers of properties in the Vancouver area.
The average price for all homes in the nation sold last month was $530304, pulled up by Toronto and Vancouver, where it was $863910 and $1110376 respectively.