April 4 (Reuters) - Toronto homes sales sagged in March, tumbling 39.5 percent from the previous year, as tighter mortgage rules and higher borrowing costs dampened demand, data showed on Wednesday.
Sales of detached homes plunged 46.3 percent and condo sales dropped 32.7 percent, as many would-be buyers put their plans on hold, the Toronto Real Estate Board (TREB) said.
The average selling price in the Toronto area was C$784,558 ($613,799), down 14.3 percent from C$915,126 in March 2017, though up 2.1 percent from February 2018.
The average selling price for a detached home, the most expensive segment of the market, plunged 17.1 percent, while the average condo price rose 6.1 percent.
Toronto’s housing market has cooled since last April, when the Ontario government introduced a foreign buyer tax and other measures aimed at slowing rapid price acceleration amid fears of a bubble.
TREB President Tim Syrianos said home sales are expected to be up relative to 2017 in the second half of this year.
But headwinds remain.
The Bank of Canada has raised interest rates three times since last July and is expected to continue to hike later in the year. And new lending rules, which make it harder for some buyers to qualify for a mortgage, took effect on Jan. 1.
The group’s home price index, preferred by analysts because it smoothes out the composition of sales, was up 1.5 percent year-over-year, TREB said.
$1 = 1.2782 Canadian dollars Reporting by Julie Gordon in Vancouver; Editing by Kim Coghill