‘Not a big surprise sales were down’

Continued from FP1

Data from TREB’s site indicates that between April 21 and 27 — after the provincial changes that also included tougher rent control rules and the ability to tax vacant homes in the city of Toronto — 2,486 properties changed hands over the week, 1,702 freehold and 784 condominiums. That was up from the 2,094 properties — 1,370 freehold and 724 condominiums — that changed hands between April 14 and 20.

“It’s not a big surprise that sales were down, when the rumours were there,” said Benjamin Tal, deputy chief economist with CIBC. “Basically, you’ve got people doing nothing on rumours and then acting after the fact.”

Looking back to the week from April 7 to 13, there were 3,303 sales (2,242 freehold and 1061 condominiums) — essentially meaning the market pulled back sharply. But given such a short-period, which could be heavily influenced by even a change in weather — the preliminary statistics have to be viewed with skepticism.

Speculation of changes to regulate the market had been brewing ahead of a meeting between the federal finance minister, his Ontario counterpart and city of Toronto mayor John Tory on April 18.

The urgency came after March data indicated resale prices had climbed 33 per cent on a year-over-year basis. In the new-home market, average detached home prices have climbed about 70 per cent in the last year to $1.78 million.

British Columbia imposed a 15-per-cent tax on foreign buyers in August and sales started falling as much as 40 per cent on a year-over-year basis, although the market was seeing a decline in activity before the tax.

Brad Henderson, chief executive of Sotheby’s Realty Canada, said the signals he’s getting from the market are mixed right now.

“I was at a meeting (Monday) morning with a large group of people from the Greater Toronto region, and we were talking about the market and some have said they are still seeing multiple offers while others are saying some of their buyers are on hold to see how it falls out,” said Henderson. “Some say foreign buyers are still purchasing even with the new tax in place.”

Craig Alexander, chief economist with the Conference Board of Canada, said it’s interesting to see how sales reacted after the announcement. “But there are a lot of other things that may attributed to volatility,” he said.