TORONTO/VANCOUVER (Reuters) – Home sales in Canada’s two largest housing markets dropped in 2017, as government measures to cool skyrocketing prices in Toronto and Vancouver restrained demand, but prices kept rising particularly in the strong condo segment.
In Toronto, sales of detached homes fell 23 percent, accounting for much of the 2017 drop, while condo sales pulled back a more muted 9.6 percent, according to a report from the Toronto Real Estate Board (TREB).
The average sale price, meanwhile, jumped 12.7 percent from 2016 to C$822,681 ($657,146), with condo prices jumping 23.1 percent and detached homes climbing 12.8 percent, TREB said.
In Vancouver, the market was also split, with surging condo demand in stark contrast to slower sales of detached homes, according to a report from the Real Estate Board of Greater Vancouver (REBGV).
Overall, sales dropped 9.9 percent compared to 2016, with the typical price of a home in the Vancouver region rising 15.9 percent to C$1,050,300. Condo prices jumped 25.9 percent, while detached homes rose 7.9 percent.
In both cities, the pace of sales picked up near the end of 2017, in part as buyers accelerated home purchases to beat new mortgage stress test requirements that started on Jan. 1.
Together, Vancouver and Toronto account for about half of house sales by volume in Canada.
Vancouver’s market staggered in 2016 after the government introduced a foreign buyers tax, but the less-expensive condo market has bounced back as investors continue to fuel demand. Toronto, hit by a similar tax in 2017, is showing a similar pattern, with detached sales swooning but the condo market showing more strength.
The real estate boards said the outlook for 2018 was unclear. They said consumer sentiment could be influenced by rising interest rates and new rules around mortgage qualifications.
Reporting by Nichola Saminather in Toronto and Julie Gordon in Vancouver; Editing by Lisa Von Ahn and David Gregorio