Toronto-area house hunters took a vacation from open houses and bidding wars in June after an earlier than usual buying spree in April and May.
Home sales declined 5.4 per cent across the GTA last month, lead by a 13 per cent downturn in sales in the City of Toronto over June of 2011, according to the Toronto Real Estate Board (TREB.)
The biggest sales decline was in the resale condo sector. Sales dipped 20 per cent in the 905 regions and 18 per cent in the City of Toronto in June over a year earlier.
But all of that was a far cry from the 28 per cent drop in home sales in Vancouver reported this week, the biggest decline in a decade in what has long been Canada’s hottest real estate market.
All eyes are now on Toronto which is bound to be further impacted by tighter new mortgage lending rules, set to kick in July 9, which were imposed by Ottawa in a deliberate effort to cool what many believe has been an overheated market.
But even last month’s breather in buying had virtually no impact on prices: The average GTA home sold for $508,622, up 7.3 per cent from June of 2011.
That means in the last year alone, the average price of a home in the 905 regions has increased from $448,579 to $481,512, while a house in the City of Toronto has jumped from $511,591 to $554,077, according to the TREB numbers.
“Right now market conditions remain tight,” with listings continuing to lag demand, said Jason Mercer, senior analyst for TREB, “so we continue to report strong price growth.”
The real estate board was quick to blame the disproportionate decline of home sales in Toronto on “the substantial upfront cost associated with the City of Toronto’s unfair Land Transfer Tax.”
That local tax, which adds about $5,900 in upfront costs on a $508,000 home, doesn’t apply to home sales in the 905 regions.