Advertisment The average home price and number of houses sold in Toronto each fell sharply in January sparking concerns that a real estate correction is taking hold in Canada’s biggest metropolitan area.



According to the Toronto Real Estate Board, the average Toronto area home price dropped 4.1% year-over-year last month to $736,783, while the number of sales in the Toronto region fell 22% compared to January 2017.



Most of the price drop across the Greater Toronto Area occurred on the back of detached houses. Those homes sold for 9.1% less year-over-year across the region, with an average cost of $970,823. The biggest price hit occurred in the 905 suburban area that rings downtown Toronto where detached home prices fell 12% compared to January 2017, selling for $897,048 on average. But even in downtown Toronto, detached homes cost 3.9% less than a year ago — selling for an average of $1.3 million.



The lone bright spot in January was in condo prices, which continued to climb – averaging $507,492 in the Toronto region, 14.6% higher than in January 2017. The average selling price of a condo in downtown Toronto was more than $100,000 higher than in the surrounding 905 area — $543,279 downtown versus $421,927 in the suburbs.



Toronto Real Estate Board President Tim Syrianos said the drop in the number of sales year-over-year is a ``wake-up call`` to Toronto City Council. The city`s government is considering a proposed $11 billion operating budget that includes $808 million in land transfer taxes. The Real Estate Board is warning city council to lessen its reliance on land transfer taxes to fund city services in the wake of the decline in home sales across the Greater Toronto Area.



“The amount of revenue the city generates from this tax goes up and down with the real estate market,” said Mr. Syrianos, noting that City Manager Peter Wallace has warned that Toronto is vulnerable to an over-reliance on land transfer revenue.