February home sales up in Montreal, down in Toronto

TORONTO • Home sales in Toronto and Montreal went in opposite directions in February, local real estate board reports showed Tuesday.

Home sales in the Greater Toronto Area plunged 34.9 per cent in February compared to the same month a year ago as buyers adjusted to new mortgage rules and government policy interventions, the Toronto Real Estate Board (TREB) said.

Montreal’s February data painted a different picture, with sales in the region up five per cent year-over-year in February, as the number of active listings dropped 17 per cent, according to the Greater Montreal Real Estate Board. The board says acceleration in price growth is a direct result of increasingly tighter market conditions.

In Toronto, prices tumbled too, with the average sales price for all housing types falling 12.4 per cent to $767,818.

TREB said the declines had been expected due to market-cooling measures brought in by the Ontario government last April and tougher new mortgage rules introduced in January. The board had also warned that figures would be particularly stark in comparison to the opening months of 2017, when a booming market sent sales and prices skyrocketing. The market slowed considerably in the second half of last year following the implementation of the Ontario measures — which included a 15 per cent foreign buyers’ tax.

“As we move further into the spring and summer months, growth in sales and selling prices is expected to pick up relative to last year,” said Jason Mercer, TREB’s director of market analysis.

While well off last year’s boom market, the February prices were actually 12 per cent higher than the average reported during the same month in 2016 “which represents an annualized increase well above the rate of inflation for the past two years,” the report states.

The data reaffirmed a split in the market between detached houses and more affordable condominium apartments. Prices for single detached family homes fell 17.2 per cent in the GTA to just over $1 million — weighed down by an 18.6 per cent decline to $1.28 million in the city of Toronto, and a 17.8 per cent drop to $911,065 in the 905 region. The number of single detached houses sold in the GTA fell by 41.2 per cent.

Meanwhile, prices in the booming condominium market continued to surge even as the number of sales took a steep slide. Prices for condominium apartments in the GTA rose 10.1 per cent to $529,782. Sales of condominiums fell by 30.8 per cent overall.

“Expect stronger price growth to continue in the comparatively more affordable townhouse and condominium apartment segments,” Mercer said. “This being said, listings supply will likely remain below average in many neighbourhoods in the GTA, which, over the long-term, could hamper affordability.”

TREB president Tim Syrianos said prospective homebuyers are still coming to terms with the “psychological impact” of the Ontario housing market measures and some have had to reevaluate their home buying plans due to higher interest rates and new mortgage stress testing guidelines brought in by the Office of the Superintendent of Financial Institutions in January.

In the Greater Montreal region, the median price of single-family homes was $310,000 last month, up six per cent year-over-year, while plexes reached $481,500, a one per cent increase.

As for condominiums, the median price grew by five per cent last month, with half of all units selling for more than $250,000.

A total of 4,081 residential sales were made last month across the city’s census metropolitan area, marking the 36th straight increase and the busiest month of February since 2012.

As was the case in 21 of the past 24 months, condominiums registered the largest increase in sales, jumping by 14 per cent.

Single-family homes and plexes posted small increases of one per cent and three per cent, respectively.