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 May was released overnight, which shows that house prices in Toronto have begun to rebound after plunging 7.4% between July and December 2017:

As at May, Toronto values were 5.9% below their July 2017 peak.

Nevertheless, annual price growth in Toronto continues to fall. After growth was running at an insane 29.3% in June 2017, annual growth turned negative in May (-0.3%):

Separate data from the Toronto Real Estate Board (TREB) shows that average sales volumes and prices were down 22.2% and 6.6% respectively in the year to May 2018 in the Greater Toronto Area (GTA):

The primary reason for Toronto’s price and sales plunge was the market-cooling measures brought in by the Ontario government in April 2017 (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 May shows that annual price growth was 15.4% in Vancouver, 3.6% in Montreal, and 4.5% across the 6-City Composite Index.

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Unconventional Economist

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