The average sale price of an existing detached home in Canada’s largest housing market has officially dipped below $1 million again, potentially a major psychological breakthrough but also a practical level that creates more access to housing.

Mid-month numbers that include sales over the first two weeks of August show the average detached home in the Greater Toronto Area sold for $974,212, an 0.8 per cent increase from a year ago but a decline from the $1,000,336 average price at the end of July. The $1 million threshold is key because of changes instituted in 2014 which banned government-backed mortgages on homes sold for more than seven figures – a move essentially aimed at hot Toronto and Vancouver markets.

“You do bring a lot more people into the equation,” said Doug Porter, chief economist with Bank of Montreal, about prices dropping below the $1 million threshold. It is worth noting the average sale price of a home in the City of Toronto was $1,200,313 over the first two weeks of this month, up 3.8 per cent from a year ago and still well above the threshold for getting mortgage.

Anyone with less than a 20 per cent down payment must get mortgage insurance which protects banks in the event of default but consumers are able to buy those homes with as little as five per cent down payment on the first $500,000 and 10 per cent on everything above $500,000 and up to $1 million.

Prices had been rising rapidly in Toronto over the last year and appear to have peaked in April, just after the Ontario provincial government introduced measures to cool the market, including a 15 per cent tax on foreign buyers in the the Greater Golden Horseshoe which is home to about nine million people in southern Ontario.

Detached prices had been rising rapidly before the measures – some say they have had more of a psychological impact on buyers  – with the average detached home sale price for the GTA soaring past $1 million in October, 2016. Detached home prices are now off almost 20 per cent since the peak.

“You look at the average price numbers and they are plunging,” said Porter, who says even on a seasonally adjusted basis house prices are down 13 per cent from the peak. “The issue is whether average is down because a lot of the high-end houses are not selling.”

One senior real estate source, who asked not to be named, said the impact of dropping prices is only at the margins. “There’s no swath of affordable new homes entering the marketplace,” he said.

There also doesn’t appear to be a massive decline in prices happening in the new homes market although Toronto builders do report sales dropping. The Building Industry and Land Development Association said this week the average price for an available new low-rise single-family homes was $1,316,693, a 45 per cent increase from a year ago but also up substantially from up from $1,250,262 price in June.

Phil Soper, chief executive of Royal LePage Real Estate Services, said it comes down to how much product under $1 million is actually making onto the market to really see what the impact on sales will be in the GTA market which is now witnessing 40 per cent year over year declines. “Whenever there is a market correction, there are winners and losers,” he said.

Ted Tsiakopoulos, regional economist for Ontario with Canada Mortgage and Housing Corp., said there has been a reset in the GTA market that is mostly driven by psychological perception of prices as opposed to a change in fundamentals. “We should remember the entire market isn’t cooling off, there is compositional shifts going on,” he said. “High-end single (detached units) have cooled off dramatically. Most of the imbalance has been in the single market. There might be more product under $1 million qualifying for insurance but that’s one of many factors going to drive the decision.”