The average home in the Greater Toronto Area sold for $732,292 in August, a 20.5-per-cent drop from the market's peak in April, when prices for all types of homes averaged $920,791, according to the Toronto Real Estate Board.
Compared to a year ago, the average price for a home in the GTA is up just 3 per cent, which means a four-month drop in prices since April has eroded almost all of the gains the Toronto market recorded late last year and earlier this year.
The total number of homes sold fell 34.8 per cent to 6,357 in August compared to a year earlier.
The detached house sector has been hit hardest, with the average price of a detached home in the City of Toronto now down 1.2 per cent compared to a year ago at $1,191,052, while detached house prices in the 905 region surrounding Toronto have fallen 0.1 per cent over the past year to an average of $906,592 in August.
From the market's peak in April this year, the average price for detached homes in the GTA has fallen 19.6 per cent to $968,494 in August from $1,205,262 in April, bringing the average detached home price back below $1,000,000 in the region.
Semi-detached home prices are still up 12.1 per cent compared to a year ago, however, while townhouse prices are 8.9 per cent higher and condominium prices are up 21.4 per cent since August, 2016.
Detached homes have become one of the weakest sectors in Toronto's real estate market in recent months as many buyers opt for more affordable options. Many who own detached houses have also opted not to list expensive homes for sale in a weakening market.
The Toronto Real Estate Board said a key reason for weakness in the average sales price in August was a change in the composition of homes sold in the month, with far fewer higher-priced homes sold compared to a year ago. TREB's benchmark house price index, which corrects for the changing composition of homes sold in the period, showed a 14.3-per-cent increase in prices in August.
The number of detached homes sold in August fell 41.6 per cent compared to the same month last year, while other types of housing had less severe sales declines. Condominium sales, for example, were down 28 per cent in August, but condo prices climbed compared to July and remain strong on a year-over-year basis.
TREB said 11,523 homes of all types were listed for sale in August, the lowest level for August since 2010 and a decline of 6.7 per cent compared to a year ago. Although new listings surged from April to June, the latest numbers suggest many potential sellers are moving to the sidelines while waiting to see if home prices recover this fall.
TREB president Tim Syrianos said economic conditions remain strong in Toronto, and his association believes the market could improve this fall as buyers start shopping again.
"Positive economic news coupled with the slower pace of price growth we are now experiencing could prompt an improvement in the demand for ownership housing, over and above the regular season bump as we move through the fall," he said in a statement.
Jason Mercer, TREB director of market analysis, said the market is currently balanced between buyers and sellers, which means price growth should "normalize" slightly above the rate of inflation.
"However, if some buyers move from the sidelines back into the marketplace, as TREB consumer research suggests may happen, an acceleration in price growth could result if listings remain at current levels," Mr. Mercer said.