March 6 (Reuters) - Toronto home sales slumped in February from a year ago as the market continued to be dampened byt ighter mortgage rules and higher borrowing costs, though demand for condominiums helped prices stabilize, data showed onTuesday.
Economists and realtors have been expecting home sales in Canada's biggest city to be weak at the start of the year, especially compared with the record sales recorded in the early months of 2017.
The Toronto Real Estate Board said sales of detached homes were down 41.2 percent last month, while semi-detached homes fell 28.7 percent, condo sales dropped 30.8 percent and townhouses were down 26.8 percent.
Total home sales were down 34.9 percent as prospective homebuyers were still coming to terms with the psychological impact of a number of measures taken by the Ontario government last year to try to cool the market, including a tax on foreign buyers, the report said.
Tighter mortgage lending rules that came into effect at the beginning of 2018 and higher interest rates have also prompted some buyers to re-evaluate their plans, said Tim Syrianos, president of the real estate board.
The Bank of Canada has raised interest rates three timessince last July and is expected to continue to hike later in theyear. BOCWATCH
The average home price in Toronto was C$767,818 ($591,129).While that was down 12.4 percent from last year, it made for a4.4 percent monthly gain compared with January.
The stabilization in prices was driven by higher costs forcondominiums. Price growth is expected to be concentrated incondos and townhomes as the year goes on given their relativeaffordability, the report said.
The home price index, preferred by analysts because itsmoothes out the composition of sales, was up 3.2 percent fromthe year before.($1 = $1.2989 Canadian)