Home sales in Toronto are going south.
The Toronto Real Estate Board reported that 6,357 homes were sold in August, marking a 34.8% drop compared to August 2016, when a record 9,813 sales were reported.
Additionally, the number of new listings to hit the market in August dropped 6.7% year-over-year. That’s the lowest level for August since 2010, the report said.
The dip is a result of cooling measures implemented by the Ontario government in April, including a 15% tax on foreign purchases.
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Toronto Real Estate Board President Tim Syrianos found an optimistic spin in the report, however.
"Positive economic news coupled with the slower pace of price growth we are now experiencing could prompt an improvement in the demand for ownership housing, over and above the regular seasonal bump, as we move through the fall," Mr. Syrianos said.
And the news isn’t all bad: The average home in the greater Toronto area sold for $732,292 in August, a 3% increase year-over-year, the report said. August was slower than July, however, when the average home sold for $746,218, according to the previous month’s report.
In the city itself, the average home price was $726,712, whereas the average was $735,861 in the surrounding area. The report did not break down sales by price range, hence there was no specific information for the luxury market.
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"This growth was driven by the semi-detached, townhouse and condominium apartment market segments that continued to experience high, single-digit or double-digit year-over-year average price increases," according to the report.
In addition, the report noted that the Multiple Listing Service’s Home Price Index composite benchmark, which accounts for typical homes in the area, was up by 14.3% year-over-year in August.
Jason Mercer, the Toronto Real Estate Board’s director of market analysis, predicted prices will normalize this fall, or possibly even rise.
"If current conditions are sustained over the coming months, we would expect to see year-over-year price growth normalize slightly above the rate of inflation," he said. "However, if some buyers move from the sidelines back into the marketplace, as [the Toronto Real Estate Board’s] consumer research suggests may happen, an acceleration in price growth could result if listings remain at current levels."