Toronto’s once-hot housing market is continuing to show signs of a slowdown, based on data released early Thursday morning by the Toronto Real Estate Board.In the last two months alone, home prices in the Greater Toronto Area have dropped 14 percent. Back in April, an average Toronto home cost $920,791 — it is now $793,915, a whopping $126,876 drop in overall prices.Semi-detached and single detached homes bore the brunt of declining prices. A single detached home in Toronto now averages at $1,055,863, a decline of $149,393 — or 12.4 percent — from April 2017. By contrast, the average price of a condominium unit remained at a competitive $519,784, a mere four percent drop from peak prices in April.Compared to this time last year, home prices were still up 6.3 percent, due sheerly to the rapid acceleration in prices that took place in the first three months of 2017.But the most interesting piece of data from TREB’s report were the number of homes that were sold in June 2017. Home sales plunged 37.3 percent from this time a year ago — the biggest drop this city has seen in eight years. The number of new residential listings, though, were up by 15.9 percent from a year ago.In essence, sellers are trying to get rid of their homes as quickly as possible, in anticipation of a further price drop. Buyers, however, are playing the waiting game, hoping to swoop in exactly when the market bottoms.“Anytime the government intervenes in the housing market, there’s usually a pause until people figure out the market again,” said Christopher Alexander, Regional Director at RE/MAX Ontario-Atlantic Canada.“We also have to keep in mind that prices were out of the ordinary in the first quarter of this year. That was not a normal market because inventory levels were so low. Of course now when you have more listings to choose from, you’ll have more flexibility to negotiate,” Alexander said.In mid-April, the Ontario government intervened by slapping a 15 percent tax on foreign buyers of Toronto homes. This was part of the government’s 16-pronged approach to address a housing market that had become absurdly unaffordable to the average Canadian.The sudden intervention left speculators, who were banking on continued double-digit price increases, in the lurch, substantially chilling the housing market. This, coupled with strong hints from the Bank of Canada of an interest rate rise, explains why home prices are on the decline in Toronto.“Since 2010, those working in — or watching — Toronto real estate have said we’re at the top of the market and yet prices and sales kept rising. We were overdue for a break in the pace,” said Lauren Haw, CEO of Zoocasa, a real estate listing site.“These sales numbers look drastic on paper, but thankfully for our buyers, they are pointing to Toronto becoming a more balanced and sustainable market in 2017.”It is questionable as to whether this decline in home prices will last.Vancouver imposed a similar foreign buyers tax back in August 2016 to curb rapidly rising prices. For about three months afterwards, home prices declined slightly, but by February 2017, they had picked back up.June data from the Real Estate Board of Greater Vancouver indicates a rally in home prices, particularly of condominiums. The average price of a condo in the Greater Vancouver Area is now at $600,700, a 17.6 percent increase from June 2016, before the foreign buyers tax was imposed.Follow Vanmala on Twitter
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