Toronto house prices in free fall

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Canada has been one of the last housing bubble markets to crack. But, crack it has. The Toronto Real Estate Board reported that house prices crashed 13% from $434,022 on average last October to $376,896 this past October. With job losses mounting on Bay Street in Toronto as the financial services sector contracts globally, Toronto is the first in a chain of dominoes to fall in the housing market in Canada.

The figure was also down from the 2006 average October sale price of $386,807.

In the greater Toronto area, the average price of a home sold in October was down 10% from a year ago to $352,974. GTA average prices were off 1% from October, 2006.

“Consumer confidence is critical to the housing market and it appears that consumer uncertainty has been prevalent in today’s market conditions,” said Maureen O’Neill, president of TREB. “We are confident levels will return as demand for housing in the GTA continues.”

That demand for housing appears to be drying up quickly. TREB reported GTA sales in October were 5,155, down 35% from a year earlier and 25% from two years ago. In the City of Toronto, sales were off 38% from a year ago. In the 905 region, sales dropped 32% from October, 2007 levels.

I have reported a number of times on Canada’s housing market, warning that it was unlikely to escape the global slowdown. However, now that commodity prices have plummeted, I would expect the housing bust to be even more severe in provinces like Alberta and British Columbia. Markets like Calgary, Edmonton and Vancouver have cooled significantly and should expect to be next to fall after Toronto

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