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Toronto's housing market showed signs of continued stabilization as sales surged amid a decline in benchmark prices.

Sales rose 19% in July to 6,961, from 5,869 in the same period a year earlier, the Toronto Real Estate Board reported Friday. Seasonally adjusted sales climbed 6.6% from June, making July the strongest month this year for resales, though it was still below the historical average.

At the same time, benchmark prices, which measure the value of a typical home, fell 0.5% from a month earlier to C$768,400 ($590,000), the biggest decline since September and the first drop this year. Average prices rose 4.8% from a year earlier to C$782,129.

The housing market in Canada's biggest city is steadying after months of falling sales that followed a slew of government regulations designed to tame runaway prices. Some analysts had warned that a sharp drop in prices was imminent, but so far housing appears to be headed for a soft landing.

"It appears that some people who initially moved to the sidelines due to the psychological impact of the Fair Housing Plan and changes to mortgage lending guidelines have re-entered the market," said Jason Mercer, TREB's director of market analysis, referring to government measures to cool demand.

Detached home sales in the region jumped 27% from last year to 3,062, while the benchmark price for the segment fell 4.2% to C$923,800. The condo apartment segment, which has led growth for months, saw sales rise by 9.4%. Condo prices rose 8.3% from last year to C$501,400 ($385,011), but fell relative to June, the first monthly decline since September.

New listings were down 1.8% from a year ago to 13,868. Active listings rose 5.2% to 19,725, from 18,751 last year.

Bloomberg News
Purchase Home prices Housing market Real estate Canada