It's Official The Toronto Housing Bubble Has Popped

Toronto home prices fell more than 6% in two weeks

Internal mid-month statistics for June from the Toronto Real Estate Board show average prices in the Greater Toronto Area shed almost 6.4 per cent in just two weeks with sales down about 50 per cent from a year ago.

TREB reported Monday, in a note sent to members, that the average home sold for $808,847 from June 1 to 14 — a sharp drop from the average of $863,910 for May. The decline comes on top of a 6.2 per cent drop in prices from April to May. The board no longer makes public mid-month stats.

The peak of the market in Canada’s largest city now appears to be in April when the average price soared to $920,791, the same month that Ontario brought in its 16-point Fair Housing Plan, which included a 15 per cent non-resident speculation tax for buyers in the Greater Golden Horseshoe and expanded rent controls that limited annual rent increases to inflation, capped at 2.5 per cent, for all rentals across the province.
 My view:

We have been warning about the bubble in Canadian house prices for several years now.
Expect Vancouver to be the next market to show up in the headlines with declining sales and falling prices.
This implies that very soon many house owners will be "under water" as the equity in the homes falls below zero.
Canada and Australia have up to now avoided the housing collapse the United States experienced 10 years ago.  But high levels of leverage always lead to the same experience - rapid deleveraging.
Considering Toronto prices have fallen 12% in just 3 months, watch to see how fast the contagion spreads.  Canadian Bank stock values are vulnerable in our view as Home Capital Group price drop recently shows.