Canada Home Sales Drop Most in Almost 5 Years on Toronto Decline
by Greg Quinn
(Bloomberg) — Canadian home sales fell by the most in almost five years last month, led by a plunge in Toronto after a foreign-buyer tax was introduced to curb runaway price speculation.
Transactions nationally fell 6.2 percent in May, the fastest monthly decline since August 2012 the Canadian Real Estate Association reported Thursday. Sales in Toronto fell by 25 percent, the most since October 2008.
The report shows the first full month of market conditions after the Ontario government set a 15 percent tax on foreign home buyers in April amid soaring prices, adding to measures by federal officials last year to rein in the Toronto and Vancouver markets.
The data “provide clear evidence that the changes have resulted in more balanced housing markets,” Gregory Klump, the real estate agency’s chief economist, said in the statement.
While sales are plunging, prices are holding steady. The nationwide benchmark climbed 1.3 percent from April and 18 percent from a year earlier, the CREA report showed.
Benchmark prices in Canada’s biggest city gained 1.2 percent on the month and 29 percent from a year earlier. That appeared to bring new supply, with new listings jumping 48 percent in May from a year ago.
“Recent changes to housing policy in Ontario have quickly caused sales and listings to become more balanced in the GTA,” Canadian Real Estate Association President Andrew Peck said in the report.