While Vancouver prices declined after British Columbia implemented its own foreign buyers tax last year, they have since rebounded, Teranet said. (Photo: Wikimedia Commons)
Canada’s housing boom showed signs of slowing down, with resale home prices falling 0.8 percent month-on-month in September, making it the first monthly decline since last year and the biggest since 2010, showed the Teranet-National Bank Composite House Price Index.
National price gains also cooled on an annual basis, with prices climbing by only 11.4 percent from the previous year, compared to August’s year-on-year growth of 13.1 percent.
This comes after the Bank of Canada recently rolled out two interest rate hikes to rein in demand, reported Reuters.
Toronto saw price increases of over 30 percent early in the year, sparking fears of a housing bubble. To cool speculation, the provincial government introduced a 15 percent tax on foreign property buyers within the city.
Separately, data from Statistics Canada revealed that new home prices, excluding condominiums and apartments, increased by 0.1 percent nationally in August, lower than the forecasted gain of 0.3 percent.
Out of the 27 markets, 15, including Vancouver and Toronto, saw prices remain unchanged. This is the third straight month new home prices in Toronto stayed flat.
In fact, Toronto’s resale home market also led September’s price decline as Canada’s largest city posted a 2.7 percent monthly drop, said Teranet.
“Many might worry about the fact that the last time we saw a string of monthly (Toronto) declines of such magnitude was during the last economic recession. They should not … market conditions appear to have stabilized over the last four months,” said Marc Pinsonneault, economist at National Bank Financial, in a note to clients.
“If that is the case, a large part of the price correction to be seen in the Toronto home resale market might be behind us.”
This article was edited by Keshia Faculin.