GTA plunge hits national market
Real estate association blames Ontario housing policy changes
The Canadian Real Estate Association (CREA) says home sales across the country dropped sharply last month, driven by a plunge in transactions in the Greater Toronto Area.
A 25.3-per-cent plummet in Toronto region sales from April to May contributed to a 6.2per-cent national decline.
CREA blamed the largest month-tomonth drop in five years to Ontario housing policy changes, including a 15-percent tax on foreign buyers.
The national average price for all homes sold last month was $530,304, pulled up by Toronto and Vancouver, where it was $863,910 and $1,110,376, respectively.
Toronto region prices were down about 7 per cent in May compared to April, but were 15-per-cent higher year over year.
Without Vancouver and Toronto, the national average house price would be about $130,000 lower: $398,546.
The foreign buyers’ tax was one of more than a dozen measures announced by the Ontario government aimed at cooling Toronto’s blistering housing market, where prices have spiralled out of reach for many potential homebuyers.
There is no cause for alarm at the Toronto region’s April to May price dip accompanied by a 43-per-cent boost in listings, one senior realtor said.
“We believe the pause is a psychological impact as opposed to a real impact of the Ontario Fair Housing plan,” said Dianne Usher, senior vice-president of Johnston and Daniel.
A look at the last 20 years — particularly from the late 1990s onward, shows that the Toronto region has seen a slow and steady upward trajectory of home prices, she said.
“Every once in a while, like in the spring of 2008, we had a sharp incline in prices, followed by a short correction and right back on again,” Usher said.
“There’s been nothing happening to our economy to change any of the influences affecting our market . . . What we’re seeing in Toronto and the Greater Golden Horseshoe is some good strength in the market,” she said.
In Vancouver, another highly scrutinized real estate landscape, home sales were up by 23 per cent month over month in May, suggesting that it is bouncing back from the slump that followed the introduction of a foreign buyers’ tax there last summer.
But it is not back in bubble territory, Usher said.
“It’s going through its natural cycle and its prices are back up and increasing from where they were a year ago. Is that bubble territory? No,” she said.
The latest sales and price statistics have, however, prompted CREA to revise its national forecast to a 1.5per-cent decline in Canadian housing sales this year compared to last year. In March, it had been predicting a 3-per-cent drop in 2017.
That again is due to the forecasts for Ontario and B.C.
Those have changed from a 0.7-percent increase in Ontario to a 2.1-percent year-over-year decline. In B.C., the 17.5-per-cent anticipated yearover-year decrease has been updated to 9 per cent.
The Toronto-area housing supply remains tight despite three consecutive months of increased inventory, including the substantial jump in May. Toronto Real Estate Board officials have said the region has a twomonth supply, up from record low inventory levels earlier in the year.
Still, since 2003, the region’s resale listings were only lower once in the peak month of May. That was last year when there were only 12,931 listings, compared to 18,477 this year. Canada-wide there were 4.7 months of inventory in the resale home market last month — up slightly from April and May, according to CREA.
The supply is similar to last year’s levels, it said. With files from Tess Kalinowski