Sales of existing homes in the Greater Toronto Area fell almost 12.5 per cent in August, compared to a year ago, while the number of new listings fell 5.5 per cent.
But the average price rose by almost 6.5 per cent, to $479,095, with the increase driven largely by detached homes. And the local real estate board is predicting that the decline in new listings will continue to fuel tough competition between potential buyers of downtown low-rise homes, a trend that it says should support further price increases.
"The trends for sales and new listings are moving somewhat in sync, suggesting that the relationship between sales and listings will continue to promote price growth moving forward," said Jason Mercer, senior manager of market analysis at the Toronto Real Estate Board.
While competition for houses is supporting their prices, prices of existing condos are being dented as sales drop.
Sales of existing condos (as opposed to newly constructed) in the downtown area covered by the 416 area code fell 22 per cent in August, pushing the average price down 4 per cent to $349,489. Condo resales dropped substantially each month this summer, after rising five per cent year-over-year in May.
In total, there were 6,418 sales of existing homes of all types through the MLS system last month, down from 7,330 in August of 2011, the board said Thursday.
"Stricter mortgage lending guidelines, which came into effect in July, arguably played a role," the board's president, Ann Hannah, said in a press release. Federal Finance Minister Jim Flaherty tightened the rules for insured mortgages this summer, including cutting the maximum amortization from 30 years to 25. Those rules kicked in July 9, and people in the industry say they appear to have had a substantial impact.
Sales of detached homes in the 416 area code fell 19 per cent, but prices rose 15 per cent to $746,300.
On Wednesday, Vancouver's real estate board said that August sales were the second-lowest level for that month since 1998, with the biggest drop coming from detached homes. New listings were also down substantially, while the average price for all types of homes in the Greater Vancouver Area was down 0.5 per cent from a year ago.