A man walks past a refelction of City Hall in Nathan Phillips Square at sunset in Toronto, Canada. Photo: Gary Hershorn/ Getty Images.

The red-hot housing market in Toronto, Canada has come to a screaming halt since regulators introduced a levy on foreign buyers.

It follows a period of rapid growth, which had analysts concerned about speculative market conditions led by activity in apartments.

This chart from the Toronto Real Estate Board (TREB) shows the recent sharp fall in the rate of annual price growth:

Although it has the data to do so, the TREB doesn’t publish median house prices, only the average price.

The annual growth rates of Toronto property markets peaked at a huge 30% in April, when the average selling price in the greater Toronto area hit $CAD920,761 ($AUD917,723) according to the TREB.

That’s when the Province of Ontario stepped in, announcing a “Fair Housing Plan” on April 20 which included a 15% levy on overseas borrowers.

Since then, a degree of fear has gripped investors with prices falling by 4.6% in July from June.

In addition, sales volume have crashed as investors shift to the sidelines in droves.

Although summer can be a quieter period for transactions, total sales volume fell by 40.4% in July from the same time last year.

“I’ve been speaking with bankers, mortgage brokers, and real estate agents,” a local observer told Wolf Richter, of the Wolf Street website.

“There is a genuine fear that a collapse in prices is at hand if buyers don’t show up in the fall (autumn).”

Total price falls since April 20 are now up to around 19%, to an average price of $CAD746,218 ($AUD743,756). On the strength of Toronto’s housing market over recent years, annual growth in July was still positive at around 5%.

Turning to the Australian market, the NSW government also put foreign investors in its sights in June this year, when it doubled the stamp duty surcharge payable by foreign investors from 4% to 8%. The measures came into effect on July 1.

That follows the introduction of the 4% surcharge by the NSW government in June 2016. Also at that time, Victoria trebled its land tax surcharge on “absentee landholders” from 0.5% to 1.5%.

Data from NAB released in July showed that homes sold to foreign investors edged higher in the June quarter, just prior to the implementation of the latest surcharge increases.

Although not as drastic as Toronto’s 15% levy, it will be interesting to note how those measures impact the estimated $AUD24 billion worth of Australian real estate that Chinese investors buy each year.

Business Insider Emails & Alerts Site highlights each day to your inbox. Email Address Join

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.