OTTAWA — Home sales across the country dropped sharply last month, driven by a plunge in the Greater Toronto Area (GTA) after the Ontario government imposed a tax on foreign buyers aimed at cooling the red-hot market.
The number of residential properties sold nationwide fell by 6.2 per cent in May compared to April, the largest month-to-month decline in nearly five years, the Canadian Real Estate Association said Thursday. The industry group for real estate agents noted sales were down a whopping 25.3 per cent month-over-month in the GTA.
The data showed that while real estate may be local, the impact of changes in a market the size of Toronto can have a sweeping effect nationally.
"This is the first full month of results since changes to Ontario housing policy made in late April. They provide clear evidence that the changes have resulted in more balanced housing markets throughout the Greater Golden Horseshoe region,'' CREA chief economist Gregory Klump said in a statement.
Condos in Toronto's South Core neighbourhood. The city has seen a precipitous drop in sales in recent months.
"For housing markets in the region, May sales activity was down most in the GTA and Oakville. This suggests the changes have squelched speculative home purchases.''
The Ontario government introduced more than a dozen measures, including a 15 per cent tax on foreign buyers, aimed at cooling Toronto's blistering housing market. Prices have spiralled out of reach for many potential homebuyers both in and on the outskirts of the city.
In the closely watched Vancouver market, sales were up by 22.8 per cent month-over-month. There are concerns that the city may be returning to bubble territory less than a year after the British Columbia government instituted a tax on foreign buyers of properties in the Vancouver area.
Nationally, the average price for all homes sold last month was $530,304, pulled up by Toronto and Vancouver, where it was $863,910 and $1,110,376, respectively.
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