Home sales in Canada plunged in May, dropping 6.2% from the previous month, according to a report released Thursday by the Canadian Real Estate Association. The dip was the largest since August 2012.
Actual activity, not seasonally adjusted, was down 1.6% from May 2016, with about 60% of local markets seeing gains since then. Cities that have seen more sales than in 2016, including Calgary, Edmonton, Ottawa and Montreal, the report said.
But sales in the Greater Toronto Area have seen a steep drop— 20.8% down from last year, and a 25.3% decline from April.
According to the association, this is largely because of Ontario’s recent adoption of housing measures meant to help keep homes affordable for local buyers. These include a 15% tax for foreign buyers, expanding rent control and other measures. Other markets around Toronto, like Oakville-Milton, Hamilton-Burlington and Barrie, have also seen steep dropoffs.
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"This is the first full month of results since changes to Ontario housing policy made in late April," Gregory Klump, CREA’s Chief Economist, said in a statement. "For housing markets in the region, May sales activity was down most in the Greater Toronto Area and Oakville. This suggests the changes have squelched speculative home purchases."
Prices in areas near Toronto have also been affected. In May, the affluent suburb of Oakville-Milton, west of the city, saw the largest month-over-month drop in almost nine years, the association reported. There, average prices fell to $760,100, a 3.09% decline from April and the largest monthly decline since December 2008.
A Tale of 2 Canadian Cities—Vancouver home sales hit record high , Toronto takes a tumble https://t.co/CTWaoGNGUR pic.twitter.com/oBWQUMKoRw
— Mansion Global (@MansionGlobal) June 6, 2017
Still, the year-over-year numbers show prices in May 2017 are 23.9% higher in Oakville-Milton and 29% higher in Greater Toronto.
Across Canada, prices were up 17.9% year-over-year in May 2017 compared to 19.8% in April, the report said. Price gains slowed for single-family homes, whereas apartments saw an over 20% gain in price since 2016.
The national average price for a Canadian home in May 2017 was $530,304, a 4.3% increase from May 2016.