How the market selloff could impact Toronto housing
Home sales in Canada's largest real estate market tumbled last month in the early days of tough new stress tests introduced by the country's top banking regulator.
There were 4,019 property sales across the Greater Toronto Area in January, marking a 22-per-cent plunge from a year earlier when a record 5,155 sales were notched, according to data released by the Toronto Real Estate Board on Tuesday. January's sales tally was 18 per cent below December's activity when 4,930 homes were sold.
All housing segments saw double-digit, year-over-year sales declines in January, with detached property sales suffering the steeping decline at 26 per cent.
Meanwhile, the overall average selling price in January fell 4.1 per cent year-over-year to $736,783, according to TREB.
Price fluctuations were uneven with condos registering a 14.6-per-cent gain from the previous year, while the average price of a detached home fell nine per cent to $970,823.
The Office of the Superintendent of Financial Institutions added to the layers of regulatory changes that have whipsawed Toronto's housing market over the last year, with its new stress test requirements for uninsured mortgages that took effect at the start of January.
Those requirements added more complexity to the market, as active listings surged 136 per cent from the previous year. It also took longer for homes to find buyers in January as properties spent 32 days on the market, on average, compared with 19 days a year ago.
"As we move through the year, expect the pace of home sales to pick up, as the psychological impact of the Fair Housing Plan starts to wane and home buyers find their footing relative to the new OSFI-mandated stress test for mortgage approvals through federally regulated lenders,” TREB President Tim Syrianos said in a press release.