Canada Home-Sales Rebound as Lower Toronto Prices Entice BuyersBy and
Canadian home sales had their first increase in five months as tumbling prices in Toronto coaxed buyers back following government moves to cool the market in the nation’s largest city.
Toronto sales jumped 14.3 percent in August from July, leading a nationwide sales gain of 1.3 percent. Toronto activity remains 36 percent below a peak set in March, the month before the Ontario government brought in measures such as a foreign buyers tax, the Canadian Real Estate Association said Friday from Ottawa.
Toronto’s rebound comes as benchmark prices fell 2.3 percent on the month, CREA said, and 7.5 percent over three months, the biggest such decline in records back to 2000. In a city where many young buyers looked at smaller properties they could still afford, prices for all dwellings from condos to single detached units fell over the past two months, the first time that’s happened since the 2009 recession.
The housing gains may be short lived. The realtor group cut its sales forecast through next year, citing the tougher Ontario rules and the prospect of higher mortgage rates. CREA projects transactions will drop 5.3 percent this year, compared with a forecast in June for a 1.5 percent decline, and the number will fall another 2.3 percent in 2018.
“Changes to Ontario housing policies and higher interest rates are factors that will continue to lean against housing market activity over the rest of the year and into 2018,” the realtor group said Friday in an updated forecast it released along with the monthly sales figures.