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Parts of Ontario's housing market are down 30%, two years after new rules to cool it down

A woman walks towards a "for sale" sign of a home that has been sold in Toronto. (REUTERS/Mark Blinch)

More than two years have passed since Ontario introduced measures to cool down its housing market, and according to new data, it worked.

The Fair Housing Plan included a 15 per cent non-resident speculation tax and rent control, which has been dialed back by the current Conservative government. A new federal mortgage stress test most certainly played a role too, but Zoocasa says the changes really got into homeowners’ heads.

“The changes had an immediate psychological impact on the market. Local real estate boards noted a large influx of listings in the following months, as skittish sellers looked to cash in before the market went soft,” said Zoocasa’s managing editor Penelope Graham, in the report.

“As a result, a number of housing markets within the province experienced double-digit per cent price and sales declines, especially among higher-priced single-family home types.”

York region has been hit particularly hard. The average price of a home in Newmarket is down 30 per cent to $725,710. It was over a million dollars before the Fair Housing Plan. Aurora is also down 30 per cent, to $888,387. Richmond Hill will still cost you more than a million dollars on average, but prices have come down 27 per cent and Zoocasa now sees it as a buyers’ market.

Ontario's Fair Housing Plan: Home prices two years later (Zoocasa)

Markham and Vaughan round out the bottom five with 24 per cent and 20 per cent declines respectively. The average price of a home has dipped below a million dollars in both markets.

On the other hand, prices have gone up in some parts of the province. The Windsor-Essex region is up 25 per cent. And yet, the average price is still a relatively affordable $343,956. London is up 19 per cent to $429,058. The Ottawa region is up 10 per cent to $450,295. Zoocasa labels all three as seller's markets.

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitte@jessysbains

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