(Bloomberg) -- Prices for Toronto homes climbed in May as buyers competed for fewer new listings amid the worst sales slump in almost a decade.
Sales dropped 22 percent to 7,834, compared with the same month last year, according to data Monday from the Toronto Real Estate Board. Seasonally adjusted, transactions fell for the fifth-straight month to the lowest level since 2009.
Sellers are holding back to see if things improve, leading to strained supply and stiffer competition between buyers, which is buoying prices, the board said. New listings dropped 26 percent to 19,022, compared with May 2017. Even so, properties took 20 days on average to sell, almost twice as long as the 11 days a year earlier.
“Market conditions are becoming tighter in the Greater Toronto Area and this will provide support for home prices as we move through the second half of 2018 and 2019,” Jason Mercer, TREB’s director of market analysis, said in a statement.
Canada’s biggest real estate market has been cooling since April 2017, when the government laid down new rules aimed at limiting speculation and reining in runaway prices. The chill deepened this year when stricter mortgage regulations took effect. Sales, especially for pricier detached homes, remain stunted, even as the market enters its busy season, typically from April to July.
Still, prices are inching higher. The benchmark, a weighted price that accounts for different home types, climbed 0.8 percent in May from the prior month to C$772,400 ($596,263). The condo apartment segment led gains, jumping 8.3 percent to C$501,000 on the year. On the other hand, detached home prices dropped 10 percent from May 2017 to C$934,100.
Average home prices in the city fell 6.6 percent over that period to C$805,320.
In Vancouver, sales are down 35 percent from May 2017 while prices are moving in the opposite direction. Benchmark home prices jumped 12 percent to C$1,094,000, led by gains across all housing segments, the Real Estate Board of Greater Vancouver said Monday.
©2018 Bloomberg L.P.