Home sales in Toronto dropped to 10,196 in May, down 20.3 per cent from a year earlier with detached home sales leading the decline (26.3 per cent).
Active listings meanwhile, saw a 42.9 per cent jump from the previous year’s record low; although availability of condos was lower year-over-year, and inventory remains constrained by historic standards.
“Home buyers definitely benefitted from a better supplied market in May, both in comparison to the same time last year and to the first four months of 2017,” said Toronto Real Estate Board president Larry Cerqua.
“However, even with the robust increase in active listings, inventory levels remain low. At the end of May, we had less than two months of inventory. This is why we continued to see very strong annual rates of price growth, albeit lower than the peak growth rates earlier this year,” he added.
Prices were up year-over-year according to TREB’s HPI benchmark index, which rose 29 per cent. The average selling price was up 14 per cent across the whole area to $863,910.
On the question of the impact of the Ontario Fair Housing Plan on sales in Toronto, TREB’s director of market analysis Jason Mercer is cautious.
“The actual, or normalized, effect of the Ontario Fair Housing Plan remains to be seen. In the past, some housing policy changes have initially led to an overreaction on the part of homeowners and buyers, which later balanced out,” he said.
He added that the jump in active listings appears to be homeowners taking advantage of higher prices, having delayed selling, perhaps due to expectation that prices would continue to rise.
CIBC chief economist Benjamin Tal says that the market conditions were already changing before the Fair Housing Plan was introduced.
“I think that is exactly what the doctor prescribed – what we need is a slowdown that is not triggered by anything,” Mr. Tal told The Globe and Mail, adding that the adjustment is healthy. He added that there is not an interest rate spike or recession that could see a crash.
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