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Report On Business GTA home resales fall only 2% in April in wake of steep declines

File photo of a house that sold recently in Toronto.

Fernando Morales/The Globe and Mail

Sales of existing homes in the Greater Toronto Area fell just 2 per cent in April compared to a year ago, after months of steep year-over-year declines.

There were 9,811 sales over the Multiple Listing Service in Canada's most populous city last month, down from 10,021 in April 2012.

The figure is up from the 7,765 homes that changed hands in March, a number that was 17 per cent lower than March 2012. In February just 5,759 sales took place, down 15 per cent from a year earlier.

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Housing sales in much of Canada, including Toronto, have been in a slump since last summer. Realtors point to stricter mortgage insurance rule changes that Finance Minister Jim Flaherty enacted in July, including cutting the maximum length of an insured mortgage to 25 years from 30.

"Despite the headwinds we have experienced in the housing market this year, April sales came in quite strong in comparison to last year," Toronto Real Estate Board president Ann Hannah stated in a press release Friday. "As we move through the spring and into the second half of 2013, the demand for home ownership should continue to firm-up relative to last year."

The real estate market was on a tear in early 2012, followed by a downturn during the second half of the year. As a result the sharp year-over-year declines in sales should dissipate, because economists point out the comparisons will be to a lower level of year-ago sales as 2013 progresses.

The Toronto Real Estate Board said Friday that the average selling price in April was $526,335, up 2 per cent from a year ago. The MLS Home Price Index composite benchmark price, which seeks to account for any change in the types of homes that are selling, was up 2.9 per cent.

The numbers include the condo market, where steep sales declines also abated in April. "The improved condo sales picture, with Toronto sales down by only one per cent compared to last year, suggests that interest in condo ownership may be improving," stated Jason Mercer, the real estate board's senior manager of market analysis.

Condo sales in the suburban area covered by the 905 area code were down 7.3 per cent, but it's the downtown core, where a flood of new development is taking place, that policy-makers and economists have been worried about.

Sales of detached homes in the downtown 416 area code were down 11.8 per cent year over year.

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Bank of Montreal economist Sal Guatieri said in a note Friday that Canada's April home sales are tracking the "soft-landing playbook." With Ottawa seeking to take some steam out of the market amid fears that it had overheated, economists have long been debating whether it is in for more severe declines or whether it will gently reach a "soft landing."

"Even Vancouver's housing downturn appears to be stabilizing," Mr. Guatieri wrote. That city saw a 6.1 per cent year-over-year decline in sales in April, compared to an 18.7-per-cent decline in March, he noted. "While demand remains weak, with sales 21 per cent below the 10-year average for the month, supply hasn't ballooned."

"Meantime, after pausing for breath early this year, Calgary's home sales jumped 8.3 per cent year-over-year in April," Mr. Guatieri added. Edmonton sales are down 6.2 per cent, but that's still above their norm for the last decade.

"All in, the Great Canadian Housing Market Crash remains one elusive beast," Mr. Guatieri wrote.

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