Toronto house prices find bottom after sharp plunge

By Leith van Onselen

Toronto’s housing market appears to have stabilised after both prices and sales abruptly plunged.

The Teranet-National Bank House Price Index for April was released overnight, which shows that house prices in Toronto have been stable for five months after plunging 7.1% since July 2017:

Annual price growth in Toronto has also crashed. After growth was running at an insane 29.3% in June 2017, annual growth has slowed to just 1.9% and will soon turn negative:

Separate data from the Toronto Real Estate Board (TREB) shows that average sales volumes and prices were down 32.1% and 12.4% respectively in the year to April 2018, although prices did rebound somewhat in the month of April:

The primary reason for Toronto’s price and sales plunge was the market-cooling measures brought in by the Ontario government last April (including a 15% foreign buyers tax), as well as tougher new mortgage rules introduced in January by the Office of the Superintendent of Financial Institutions.

Elsewhere in Canada, the Teranet-National Bank House Price Index for April shows that annual price growth was 15.9% in Vancouver, 3.9% in Montreal, and 5.6% across the 6-City Composite Index.

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Unconventional Economist

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

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