Data released Thursday revealed home sales in Canada's largest market plummeted in July from a year earlier, and also showed prices were down nearly 19% from April as provincial moves to cool a long housing boom in Canada's largest city spooked buyers.
Sales in Toronto fell 40.4% last month from a year ago, the Toronto Real Estate Board (TREB) said in a report. It was the fourth straight month of declining sales after a years-long boom sparked fears of a bubble.
While prices were up 18.1%compared with a year earlier, according to the group's home price index, they were down 4.6% from June as demand dropped and the number of new listings rose again, TREB said.
The average selling price for all home types combined in Toronto was $746,218, up just 5% from last year, and down 18.8% from a peak of $919,449 in April.
The Ontario government introduced a number of measures in late April, including a foreign buyers' tax, in a bid to cool the housing market in Toronto and the surrounding areas amid fears of a bubble.
While most data has shown foreign buyers represent only a small portion of buyers in Toronto, TREB said the government measures sparked a shift in sentiment.
The dramatic shift in the Toronto market comes as the Bank of Canada has begun what most analysts believe will be a gradual process of raising interest rates from near historic lows. The central bank raised its key rate by 25 basis points to 0.75% in July and markets expect at least one more hike before the end of the year, likely in October
