Toronto home sales are off to the worst start in nine years, as tougher rules for mortgage qualifications and rising interest rates continue to push buyers out of the market.
Sales fell for four straight months on a seasonally adjusted basis, with the fewest transactions to start a year since the 2009 recession, according to data Thursday from the Toronto Real Estate Board. April itself was one of the weakest months in the past 15 years for sales in Canada’s biggest city.
Prices, however, continued to stabilize. The benchmark, which is weighted to account for differences in home type, climbed 0.7 percent from last month to C$766,300 ($595,700). The condo apartment segment helped boost prices, jumping 10 percent to C$495,600 from a year earlier. In contrast, detached home prices tumbled 10 percent from April 2017 to C$927,800.
Similarly, Vancouver benchmark prices rose 14 percent in April from a year ago, while sales fell 27 percent to a 17-year low for the month, according to the Real Estate Board of Greater Vancouver.
Canada’s once-hot housing market has been correcting in recent months, adjusting to a series of tighter regulations aimed at taming prices and debt levels. Sales have cooled particularly for ’s pricier detached homes, as new mortgage guidelines that came into effect on Jan. 1 make it harder for buyers to qualify for loans. The slowdown has put the market on edge as it enters its traditionally busy spring selling season.
Toronto sales were down almost a third in April from a year earlier to 7,792 units, the fewest for the month since 2003.
“Market conditions should support moderate increases in home prices as we move through the second half of the year, particularly for condominium apartments and higher density low-rise home types,” Jason Mercer, TREB’s Director of Market Analysis said in a statement.
The high-end of Toronto’s housing market continued to weaken after last year’s boom. Sales of detached homes worth C$2 million or more accounted for 5.5 percent of the segment’s total, down from 10 percent a year earlier.
New listings fell 25 percent from April 2017 to 16,273. Average home prices in the Toronto region fell 12 percent over that period to C$804,584.