TORONTO — The Toronto real estate market appears to be stabilizing following months of payback after last year’s frenzied pace of sales and skyrocketing prices, but home sales sunk to their lowest level since 2009 last month.

The Toronto Real Estate Board revealed Thursday that the market saw 7,792 transactions in April, a 32.1 per cent drop from the same period last year when 11,468 homes were sold. Observers believe last April may have been the peak of the market as activity soared ahead of the Ontario government’s package of measures to cool the market that included taxes on vacant properties and a non-resident speculation tax.

Sales were also down 1.6 per cent from March, while home prices fell 0.2 per cent compared to the month before.

The price decline was much larger on a year-over-year basis. The average home fell by 12.4 per cent from last year, to $804,584 in April.

TREB described the month-over-month changes as “minimal” and said sales trends have “flattened out” from the steeper drop-off seen in January and February — an indication that the market could be slowly climbing out of the sluggish state it was in at the start of the year and correcting the overheated conditions that pushed the province and mortgage regulators to introduce cooling measures last year.

Activity dropped off in the opening months of the year after cooling pressure at the federal level, including a financial stress test for buyers implemented Jan. 1 for federally-regulated lenders and increases in both variable and fixed-rate mortgage rates as a result of moves by the Bank of Canada and fluctuations in the bond markets.

“While average selling prices have not climbed back to last year’s record peak, April’s price level represents a substantial gain over the past decade,” said TREB president Tim Syrianos.

Watch: Legalized cannabis could have some surprising effects on the housing market

However, he said the MLS home price index composite benchmark, which strips out the impact of changes in the mix of home sales, was down 5.2 per cent compared with a year ago and the number of new listings in April had plunged to 16,273, a 24.6 per cent decrease from the 21,571 listings seen last year at the same time.

BMO Economics analyst Priscilla Thiagamoorthy declared the market “soggy,” but she said the balance between sales and new listings “looks roughly stable.”

Sales in Canada’s priciest market, Vancouver, also fell significantly last month.

The Real Estate Board of Greater Vancouver said Wednesday that this was its weakest April for single-family home sales in nearly 30 years. Only 171 detached homes in the city were sold that month and regional sales fell to a 17-year low for April. The board said 2,579 detached properties, townhouses and condominiums sold last month in Metro Vancouver, down 27.4 per cent from April 2017.

In the Greater Toronto Area, York Region took the most significant hit. TREB numbers show the region saw the biggest year-over-year price declines in April.

Those kinds of drops “mask the fact that market conditions should support moderate increases in home prices as we move through the second half of the year, particularly for condominium apartments and higher density low-rise home types,” said Jason Mercer, TREB’s director of market analysis.

His comments are in line with the rising prevalence of condo sales, which are increasingly being eyed by prospective buyers, searching for moderately-priced housing options in a market where affordable housing is more of struggle to find than in other Canadian cities.

Tax relief for homebuyers?

TREB pleaded for parties running in the Ontario’s June election to turn their attention to housing, despite the Liberal government’ newly-enacted measures last April that included taxes on vacant properties and a non-resident speculation tax, as well as the introduction by mortgage regulators of a stress test for uninsured borrowers at the start of the year.

“We believe the next step should be tax relief, especially from land transfer taxes, both provincial and the Toronto land transfer tax, and efforts to facilitate an increase in the supply of missing middle housing that fills the gap between single family homes and high rises,” said Syrianos.

“Furthermore, we believe that any attempt to increase the Toronto land transfer tax should require approval from the provincial government, given the significance of Toronto’s economy to the province and the connections between the Toronto real estate market and that of the broader GTA.”

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Canada’s tariffs on imported U.S. goods — everything from strawberry jam to sleeping bags — could steer consumers to seek out cheaper, made-in-Canada alternatives, but domestic industry players are fearful that input costs will rise and American politicians could retaliate in kind.

Gerhard Latka, president of Canadian jam maker Crofter’s Food Ltd., said while the company does stand to benefit, he is concerned that their industry is now in the crosshairs of U.S. President Donald Trump.

“We’ve poked the bear … There’s a silver lining, but it is far outweighed by the risk,” he said from Parry Sound, Ont., noting that his company exports as much as 80 per cent of its product south of the border.

Canadian businesses are digesting the industry ramifications of the cross-border tariff war that erupted on Thursday, with Trump announcing the U.S. will slap tariffs on Canadian steel and aluminum and Prime Minister Justin Trudeau firing back with $16.6-billion worth of “dollar-for-dollar” countermeasures on goods ranging from playing cards to maple syrup to yogurt.

The 10 per cent tariffs or similar measures on selected U.S. imports are set to take effect July 1 after an industry consultation period. Part of the 10 per cent levy at the wholesale level may eventually be passed on to Canadian consumers in the retail price, if the tariff war persists.

Watch: Trudeau responds to U.S. tariffs

However, readily available Canadian substitutes for these U.S. goods could get a boost as result, said Joanne McNeish, an associate professor at the Ted Rogers School of Management at Ryerson University. On top of being potentially cheaper than U.S. goods subject to the tariffs, some Canadian consumers or businesses may shop more patriotically in protest, she said.

“People will start to look at the tags more closely,” McNeish said.

While there may be Canadian-made alternatives, these tariffs will “inflict pain” on domestic firms as some inputs or unique products cannot easily be switched or replaced, said Dan Kelly, the chief executive of the Canadian Federation of Independent Business.

“That is little comfort for firms that have supply chains where these products are built in,” he said.

Orange juice is one example of a U.S. good that can’t be substituted easily at home.

Foreign Affairs Minister Chrystia Freeland said Thursday that the products subject to tariffs were carefully chosen to limit the impact on Canadian producers and consumers.

There could be opportunities for a bump in sales for Canadian substitutes for these U.S. products, said Mike Von Massow, associate professor in the food, agricultural and resource economics department at the University of Guelph.

However, the price advantage for domestic goods will be less than 10 per cent, as the surtax is unlikely to trickle down to the retail price of these American products in full, he added.

The potential for a tit-for-tat measure from the U.S. is indeed a risk in any trade war, he said, but Trump is likely to target bigger industries with more “leverage.”

Still, some American lawmakers have the same fear about its trade war with China. On Friday, for example, Maine Congressional members urged Trump not to put a tariff on seafood because they are worried the Chinese would retaliate with a similar measure and hurt the state’s lobster industry, which exports millions of dollars worth of lobster to the Asian country.

‘An attempt to bring pressure on the White House’

Many of the U.S. products subject to tariffs in Canada appear to be chosen based on political rather than economic impact, said Von Massow.

For example, Massow said, Canada imports just $3 million worth of yogurt from the U.S. annually — most of which is from Wisconsin, the home state of House Speaker Paul Ryan. Another product on the list is whiskey, which comes from Tennessee or Kentucky, the latter of which is the home state of Republican Senate leader Mitch McConnell.

“Putting a levy on something that we import $3 million worth of is not likely to have any impact whatsoever on any Canadian consumers. It’s much more likely to have an impact on someone who might have the phone number of Paul Ryan … An attempt to bring pressure on the White House that way.”

OTTAWA — The country’s annual inflation rate rose to 2.5 per cent in June as consumer prices grew at their fastest pace in more than six years, Statistics Canada said in a report Friday.

The federal agency’s latest inflation number received a boost from higher energy prices, especially gasoline, fuel oil and other fuels. It followed a 2.2 per cent reading for May.

Other big contributors behind last month’s stronger inflation figure were pricier airline tickets, restaurants and mortgage interest costs. The downward pressure on prices last month was led by cheaper costs for telephone services, travel tours and digital equipment and devices.

The June pace lifted inflation to its highest point since February 2012 when it was 2.6 per cent. It also moved the number farther away from the two per cent mid-point of the Bank of Canada’s target range.

The central bank, however, has been expecting inflation to rise.

Last week, the central bank predicted inflation to move as high as 2.5 per cent — due to temporary factors like higher gas prices — before it settles back down to two per cent in the second half of 2019.

The Bank of Canada can use interest rate hikes as a tool to help prevent inflation from climbing too high. Governor Stephen Poloz tries to keep inflation within a range of between one and three per cent.

“Downside risks to trade remain at the fore, but the economic data are increasingly making the case for further Bank of Canada rate hikes,” TD Bank senior economist James Marple wrote in a client note.

“With a positive retail sales report, and the upside surprise on inflation, the odds of one more hike this year have risen.”

Earlier: Bank of Canada hikes interest rates despite trade uncertainty (story continues below)

Poloz raised the trend-setting interest rate to 1.5 per cent last week. It was the bank’s fourth hike over the last 12 months.

In a separate release, Statistics Canada said retail trade expanded by two per cent in May thanks to higher sales at vehicle and auto parts dealers as well as gas stations. Sales growth was just 0.9 per cent in May if these categories are excluded, the agency said.

The May increase follows an April contraction of 0.9 per cent.

— With a file from HuffPost Canada

See if this makes sense to you.

Sales of new condos in Toronto have more or less fallen off a cliff, down 66.5 per cent in March compared to the same month a year earlier. So what did prices do? They soared by nearly 40 per cent during the same period.

That’s according to new data from the Building Industry and Land Development Association (BILD GTA), which reports that there were 1,649 new condos sold in Greater Toronto in March, down from 4,329 the same month a year earlier.

Keep in mind that last year at this time, Toronto’s housing market was at the peak of its frenzy, making the comparison to this year look that much worse. But sales in March were still about 21 per cent lower than their long-run average. BILD called it “a quiet month” for the market.

But it wasn’t quiet on the pricing side. The benchmark price for a condo sold in Toronto was $742,801 in March, up 39.7 per cent in a year. Part of the increase comes from the fact larger condos are being used to measure the benchmark price (900 square feet, up from 800 square feet a year ago). But the price per square foot also increased, to $825 from $666 last year.

So what gives? How can prices keep soaring even when sales are way down?

By and large, the industry says Toronto — like the other super-pricey city in Canada, Vancouver — is facing a supply shortage at the same time that buyers have seen their purchasing power reduced, thanks to new housing and mortgage rules.

“Recent changes to mortgage regulations are fuelling demand for lower priced homes while shrinking the pool of qualified buyers for higher-priced homes,” said Gregory Klump, chief economist at the Canadian Real Estate Association, in a report earlier this month.

“Given their limited supply, the shift of demand into lower price segments is causing those sale prices to climb. As a result, ‘affordably priced’ homes are becoming less affordable while mortgage financing for higher priced homes remains out of reach of many aspiring move-up homebuyers.”

BILD president and CEO David Wilkes echoes the argument of many in Toronto’s real estate sector, saying that restrictions on development are preventing housing supply from coming online.

“If we want to see more housing that people can afford, we need to address this region’s housing supply problem,” Wilkes said in a statement.

“And for that to happen, we will all need to work together to remove barriers to development, which include outdated zoning that doesn’t support intensification, miles of government red tape, and lack of critical infrastructure.”

Supply is actually increasing…

But is there really such a huge supply shortage right now, one that justifies a 40-per-cent price hike? There’s no doubt that the number of single-family homes being built in the GTA has been dropping for years. But the supply of condos is actually on the rise this year.

Thanks to that, there were 12,457 new housing units available for sale in the GTA in March, up 22.7 per cent from the same month a year earlier. Still, to put that in perspective, that’s well down from the more than 20,000 units available two years ago.

So it may not entirely be a supply issue; it may also be that some buyers simply haven’t gotten the memo about the new reality of Toronto’s slowing housing market, and are still willing to pay big premiums for a property.

But if this soft patch continues, more buyers are likely to come to the conclusion that now is a good time to wait and see if prices will come down.

“The cumulative effects of government measures to cool the housing market are likely keeping many potential buyers out of the housing market,” Wilkes said. “Many may simply be taking a wait-and-see approach.”

With the market giving such contradictory signals, is it any wonder buyers want to sit this one out?

CORRECTION: An earlier version of this story stated that the average price of a new condo sold in Toronto was $742,801 in March. That is, in fact, the benchmark price.

This seems to be the year of the condo in Canadian real estate — even, it would seem, at the very top end of the market.

According to listings data compiled by Point2 Homes, the most expensive residential property for sale in Canada right now is a $38-million penthouse condo overlooking the city skyline and mountains.

It’s a whopper of a property, sitting atop the Fairmont Pacific Hotel and occupying 6,700 square feet of living space — not including the 2,900 square feet of outdoor deck space. Truly, a deserving home for a young student with wealthy parents for a wealthy buyer. (More pics below.)

But if a condo is Canada’s most expensive listing these days, that might also have to do with the rapid slowdown in the luxury housing market in Canada recently.

“Although these staggering prices remain prohibitive for most people, compared to last year’s figures, the values for the most expensive homes … have toned down significantly,” Point2 Homes says on its blog. It noted that the most expensive home listed in Canada last year was Belmont Estate on Vancouver’s west side, with an asking price of $63 million.

Watch: How much home can “peak millennials” afford in Canada? (Story continues below)

Sales of luxury homes in Toronto fell by nearly 68 per cent in the first quarter of this year, Royal LePage reported earlier this month. Sales were down 38 per cent in Vancouver during the same period.

“Overall, sales activity declined in Greater Vancouver and the GTA luxury real estate market as both sellers and buyers adjusted to federal and provincial measures affecting both domestic and foreign buyers,” the report said.

But the condo market seems to be holding up more strongly these days, as buyers shift attention to the more affordably-priced segment of the housing market. Yet as these listings show, condos can be as pricey as single-family homes, even in the luxury market.

And at the end of the day, this list shows you’re still nowhere near owning one of Canada’s priciest properties. But you can certainly look. Here are the five most expensive properties for sale in Canada today. They are, without exception and not surprisingly, all in Toronto and Vancouver.

5: A veritable palace in Vancouver’s Shaugnessy Heights: $29.98 million

Vancouver’s Shaugnessy is one of Canada’s ritziest neighbourhoods, a leafy paradise of sprawling mansions just south of the downtown core.

Even by Shaugnessy standards, this three-story house is big — six bedrooms and six baths on more than 12,000 square feet of living space. The property features a “stunning two-story foyer,” according to the listing realtor, as well as a home theatre with a curved projection screen and a “700-bottle climate-controlled wine cellar” for when you’re having a few friends over.

4. A two-story penthouse in Toronto’s Yorkville neighbourhood: $31.5 million

It’s not often you can find a house in Toronto’s inner city that gives you the sort of space you’d get in the country, but if you have $31.5 million, or can somehow get a mortgage for that much, you can make it happen.

Recently featured in the New York Times, this condo in the heart of Toronto’s upscale Yorkville neighbourhood features 10,200 square feet of living space on two storeys, and some 5,000 square feet of terraces. Besides four bedrooms and six full baths, there’s also a two-storey foyer, a library and a gym. And the views are striking.

3. A mansion in Vancouver’s inner city, with a fantastic pool: $34.8 million

Another property located in Vancouver’s Shaugnessy area, this half-acre property features six bedrooms and seven full baths on more than 11,000 square feet of living space.

There’s a wine cellar large enough for 1,200 bottles, a billiard room and a “state of the art media room,” but it’s the outdoor features that really grab attention here: A stunning heated infinity pool, complete with an outdoor kitchen and pizza oven, a poolside dining area and a cabana. In the summer months, you might never step inside.

2. A behemoth in Toronto’s Bridle Path: $35 million

When it was listed for sale in 2014, 68 The Bridle Path, in the ritzy Toronto inner suburb of the same name, was asking $25 million. It’s now listed for $35 million. (At these price levels it’s all sort of abstract, isn’t it?)

The property was built in the early 1980s by real estate developer Robert Campeau, and its guests over the years have included Pierre Trudeau and Jane Fonda. It has been used as a set for TV shows as well.

The house features 10 bedrooms and 14 bathrooms, numerous fireplaces and a sizeable indoor pool. At 28,000 square feet, it’s the largest, by living space, of the properties on this top-five list.

1. A penthouse condo in Vancouver’s Coal Harbour: $38 million

Penthouse Two atop the Fairmont Pacific Rim Hotel, overlooking Vancouver’s harbour, has 6,700 square feet of living space, or about one-quarter as much as the second-most expensive property for sale in Canada, the above-mentioned Bridle Path behemoth.

But this is Vancouver, and space is tight. This property still features four bedrooms and four full baths, along with amenities like a gym and a pool with hot tub. But it’s the views around Vancouver and the mountains that surely take the cake as the most eye-catching feature.

VIDEO

HONG KONG — The U.S. clothing retailer Gap apologized Tuesday for selling T-shirts with what it says is an incorrect map of China that didn’t include self-ruled Taiwan, in the latest example of corporate kowtowing to Beijing.

“Upon the realization that one of our T-shirts sold in some overseas markets mistakenly failed to reflect the correct map of China, we urgently launched an internal investigation across the group and have decided to immediately pull back this T-shirt from all the concerned global markets,” the company said in a statement, adding that the shirts had already been pulled from Chinese shelves and destroyed.

The company took action after photos began circulating on Chinese social media of a T-shirt showing a map that didn’t include Taiwan, a self-ruled island that Beijing regards as Chinese territory. The map also appeared to leave out southern Tibet and the disputed South China Sea, the state-owned Global Times said, adding that it drew hundreds of complaints on China’s Weibo microblogging platform.

The photos were taken at a Gap shop in Canada’s Niagara region, Global Times said. The shirt could not be found on Gap websites and it wasn’t clear whether it was still being sold in shops in some countries.

“We sincerely apologize for this unintentional error,” said the company, which issued the statement through its public relations firm APCO after making a similar apology late Monday on its Weibo account.

Gap promised to carry out “more rigorous reviews” to prevent similar incidents and said it respected China’s
“sovereignty and territorial integrity” and strictly followed the country’s laws and rules.

China noted Gap’s apology and “will follow carefully their actions and remarks later on,” Foreign Ministry spokesman Lu Kang said at a daily briefing in Beijing.

Latest company to apologize to China

Taiwan’s Foreign Minister Joseph Wu told reporters that China pressuring companies like Gap to change how they refer to Taiwan was “rather unfortunate in terms of cross-strait relations” and would push its residents “further and further away” rather than winning their “hearts and minds.”

Gap is the latest of several companies that have apologized for perceived slights to China’s sovereignty.

Delta Air Lines, hotel operator Marriott and fashion brand Zara are among businesses that have apologized to China for referring to Taiwan Hong Kong, and Tibet as countries on websites or promotional material. Mercedes-Benz said sorry for quoting the Dalai Lama on social media. The Tibetan spiritual leader is reviled by Beijing.

The U.S. has started pushing back against Beijing, with the White House condemning China’s efforts to control how U.S. airlines refer to Taiwan, Hong Kong and Macau as “Orwellian nonsense.”

____

AP researcher Liu Zheng in Beijing and videojournalist Johnson Lai in Taipei, Taiwan contributed to this report.

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