Provincial government measures appeared to have had the desired effect, putting a weight on Canadian home resales last month.
Figures released Monday morning by the Canadian Real Estate Association showed the resale of Canadian homes fell 6.7% in June from May, the largest monthly drop since 2010 and the third straight monthly decline as sales in Toronto plunged.
CREA said actual sales, not seasonally adjusted, slumped 11.4% from June 2016, while home prices surged 15.8% from a year earlier, according to the group's home price index.
The industry group also said changes to housing rules in Ontario prompted homebuyers to wait and see how the market would react to yet another attempt to rein in the housing boom.
The Wynne government in Ontario introduced a 16-point plan to douse speculation blamed for fueling an extended housing boom. The changes included a 15% foreign buyers tax similar to one imposed in Vancouver in 2016.
Rising interest rates, including higher mortgage rates and a move by the Bank of Canada last week to hike its official interest rate for the first time in nearly seven years, could also play a role in the cooling market.
The report showed new listings fell 1.5% in June after two months of record listings in April and May, but sales dropped even further, driving the sales-to-new listings ratio to 52.8%, considered balanced territory. The ratio had been in the high-60% range just three months ago, when sellers in Toronto could expect multiple offers or bidding wars.
CREA concludes that, while year-over-year price gains remained in the double digits, the rate of appreciation has slowed and the actual national average price for homes sold in June was $504,458, up just 0.4% from a year earlier,
