A 10 per cent slip in Toronto condo sales forced an overall decline of 1.5 per cent in Canada’s most buoyant market last month, according to the city's real estate board.
Condos sales fell to 1,753 for July, with the overall sale of 7,570 homes that month, compared to the 7,683 that sold a year earlier.
That likely points to a significant drop off in the number of first-time homebuyers, a segment of the market brokers traditionally rely on.
Still, Torotno Realtors aren`t yet convinced of a coming correction.
"Very strong annual sales growth in the first half of 2012 and an earlier peak in sales this spring compared to 2011 help explain more moderate sales this summer," Ann Hannah, president of the Toronto Real Estate Board, said Friday in sharing the report.
But a key factor in the decline is likely the new mortgage rules around amortization, believed to have encouraged many first-time buyers to put off their purchases in hopes of a value decline.
That hasn’t yet happened across key segments of Toronto’s housing market.
The average selling price in July was $476,947, up 4 per cent from a year ago, just below the MLS national average of 7.1 per cent, year-over-year.
Still the growing number of listings means that investors and other condo sellers, may need to adjust their price expectations.
New listings in July totalled 13,888, or 1,400 more than the year-ago period.
That trend is likely to encourage many flip investors in the condo market to abandon that strategy for buy-and-hold one in order to protect future capital gains and exploit tight demand for hous rental units.