Toronto home sales jump in October, even as Vancouver's plunge

A "Sold over asking" sign is on display on a house for sale in Toronto's housing market in Toronto, Ontario, Canada, October 21, 2016. REUTERS/Hyungwon Kang

TORONTO (Reuters) - Toronto home sales rose 11.5 percent in October from a year earlier, the industry group for the city’s real estate agents said Thursday, contrasting with a sharp decline in Vancouver where a tax on foreign buyers has weighed on the market.

Activity in Canada’s two most expensive housing markets has been closely watched by policymakers, who have taken steps to try to cool the sector in the hopes of avoiding a crash in prices later on.

The Toronto Real Estate Board said a record 9,768 sales were reported in October 2016. It said its benchmark home price index was up 19.7 per cent from a year earlier. The average selling price for all home types was C$762,975 ($570,000), a 21.1 percent rise over the same time period.

By contrast, data out Wednesday showed Vancouver home sales slid 38.8 percent from the same period in October, while prices remained up from a year earlier.

British Columbia introduced a foreign property transfer tax effective Aug. 2 in Vancouver in an effort to improve affordability in Canada’s most expensive property market. Some industry experts have said the tax could steer foreign buyers towards Toronto instead.

Separately, the Canadian government said in early October it will tighten mortgage rules and close a tax loophole on home sales, seeking to rein in both foreign investors and indebted consumers in its latest move to cool a market that some have called a housing bubble.

“As we move through November and December, we will be watching the sales and listings trends closely, in light of the recent policy changes announced by the Federal Minister of Finance.” Toronto Real Estate Board President Larry Cerqua said in a statement.

Reporting by Fergal Smith; Editing by David Gregorio