Sales of existing homes in the greater Toronto area were 15-per-cent lower in February than a year ago, the local real estate board said Tuesday.
There were 5,759 sales during the month, down from 6,809 in the same month during 2012. However, the Toronto Real Estate Board, which represents the city's realtors, noted that 2012 was a leap year and had one extra day in February. Adjusting to compare a 28-day-period last year to a 28-day-period this year results in a sales decline of 10.5 per cent, it said.
Either way it's clear that the market has not rebounded from the steep slowdown in sales that occurred during the second half of last year. Finance Minister Jim Flaherty tightened the mortgage insurance rules nationwide last summer in a bid to stem the growth of consumer debt levels and house prices, amid fears the market was growing too hot.
The real estate board's MLS Home Price Index Composite Benchmark price, which seeks to compare apples to apples by accounting for any changes in the size or types of homes that are selling, has risen by more than 3 per cent in the past year, the board said.
It added that fewer luxury homes sold this month. The average, unadjusted, selling price in February was $510,580, up two per cent from a year ago.
"Stricter mortgage lending guidelines that precluded government backed mortgages on homes sold for over one million dollars and the City of Toronto's additional upfront land transfer tax arguably played a role in the slower pace of luxury detached home sales," stated Toronto Real Estate Board president Ann Hannah, who has been speaking out about both Mr. Flaherty's tighter rules and the land transfer tax as sales have sunk.
Sales over the MLS of existing condos in the downtown area covered by the 416 area code dropped 20 per cent this month. And the sharp decrease in sales in recent months is now catching up to prices, which were 4.7 per cent lower in February than a year ago downtown. Condo sales in the 905 area code that covers the suburbs surrounding the city were also down about 20 per cent, but their prices continued to rise.
When he made the rule changes to tighten the market in July, Mr. Flaherty cited Toronto's condo market as one of the areas in the country he was most concerned about.
Detached home sales were down 16.9 per cent in the 416 area and 15.8 per cent in the 905 area, with prices still up by 0.1 per cent and 3.4 per cent respectively.
New listings in the Greater Toronto area came in at 11,052 this month, down from 12,592 last February.