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Sales fell 34.8 percent month from August 2016, the Toronto Real
Estate Board (TREB) said in a report. It was the fifth straight
month of declining sales after a years-long boom that sparked
fears of a bubble.
While prices were up 3.0 percent compared with a year earlier,
according to the group's home price index, they were down 1.8
percent from July as both sales and new listings fell, TREB
said.
The average selling price for all home types combined was
C$732,292 ($591,273), down 20.3 percent from a peak C$919,086 in
April.
The Ontario government introduced multiple measures in late
April, including a foreign buyers tax, in a bid to cool the
housing market in Toronto and the surrounding areas.
While most data has shown foreign buyers represent only a small
portion of buyers in Toronto, TREB said the government move
sparked a shift in sentiment.
"If current conditions are sustained over the coming months, we
would expect to see year-over-year price growth normalize
slightly above the rate of inflation," the board's director of
market analysis, Jason Mercer, said in a statement.
New listings fell 6.7 percent from a year earlier, while active
listings were up 65 percent as properties sit on the market for
longer.
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
percent in July and markets expect at least one more hike before
the end of the year, possibly later on Wednesday.
Some experts have said low rates have encouraged consumers to
take on too much debt and fueled the housing boom.
(Reporting by Andrea Hopkins; Editing by Richard Borsuk)
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