Canadian house prices continue to march higher, with the average price of one sold in April hitting $559,317 — an increase of more than 10 per cent in a year.
The Canadian Real Estate Association said Monday there were 7.5 per cent fewer sales in April than there were the same month a year earlier, but prices continued to rise.
Last month, Ontario moved to implement more than a dozen new rules aimed at curbing speculation in the housing market. While the full impact can't be tabulated yet, in the early going, those rule changes appear to be having the effect of cooling the market.
"Homebuyers and sellers both reacted to the recent Ontario government policy announcement aimed at cooling housing markets in and around Toronto," CREA's chief economist Gregory Klump said, noting that sales dropped in April in many markets just outside the Greater Toronto Area.
"It suggests these housing markets have started to cool."
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Economist Robert Kavcic with the Bank of Montreal agrees with that assessment, noting Toronto's market is showing signs of cooling the way Vancouver's did after that province implemented its own new rules to curb foreign buyers last summer.
Sales slow, but prices rise
In Vancouver, sales are still below where they were last summer, but have risen by more than 20 per cent in the first four months of the year. And prices, meanwhile, are back above where they were last August.
"In a nutshell, the market looks to have moved on from last year's policy changes," Kavcic said, and that may well be what happens to Toronto after the current adjustment period.
Sales in the Greater Toronto Area fell by almost seven per cent in a month, but prices still rose — exactly what happened in the early days of Vancouver's mini-slowdown, before prices started falling too.
"Peak price growth in the region might be behind us," Kavcic said. "How much growth slows in the wake of the new measures, and how persistent it is, remains to be seen."
Outside Toronto and Vancouver, Canada's housing market is much more stable. Stripping those two cities out of the equation, the national average price drops by more than $150,000 to just over $400,000 in April.