TORONTO -- Canada's largest real estate board said Greater Toronto Area home sales in March were down 39.5 per cent from a frenzied pace last year, as the market continued to feel the effects of cooling measures introduced at both the provincial and federal levels.
Both sales and price figures reported by on Wednesday dropped significantly from last year -- what some observers consider a market peak --when home prices and sales skyrocketed and bidding wars became the norm, pushing the Ontario government to introduce a package of measures last April to cool the market.
That was followed by a financial stress test for buyers, which officially came into effect on Jan. 1 for federally regulated lenders, following an October announcement by the Office of the Superintendent of Financial Institutions. In addition, both variable and fixed-rate mortgage rates have risen over the past year as a result of moves by the Bank of Canada and fluctuations in the bond markets.
March's sales figures were also down 17.9 per cent compared with averages over the last 10 years, while the number of new listings decreased by three per cent.
New sales listings totalled 14,866, representing a 12.4 per cent drop from last March, which helped to keep the market balanced between supply and demand. The low level of homes for sale helped keep prices in check, rising 2.2 per cent compared to February.
Sales also rebounded from the month before, leading BMO Capital Markets economists Robert Kavcic and Jennifer Lee to interpret the numbers as a sign that the market "is showing more signs of stabilizing."
"While active listings are still more than double a year ago, we're seeing a slow tightening of conditions off the mid-2017 lows," they said, in a note Wednesday morning. "Keep in mind, too, that the market was drum-tight a year ago."
However, when compared to last March, the average price of a home in the GTA was down 14.2 per cent to $784,558 last month, a decrease from the average of $915,126 in the same month last year.
Despite the decrease, TREB predicted home sales will be up relative to 2017 in the second half of this year.
"Right now, when we are comparing home prices, we are comparing two starkly different periods of time," said Jason Mercer, TREB's director of market analysis.
He said there was less than a month of inventory last year versus two and three months this year.
"It makes sense that we haven't seen prices climb back to last year's peak," Mercer said. "However, in the second half of the year, expect to see the annual rate of price growth improve compared to Q1, as sales increase relative to the below-average level of listings."
