Resale activity in the Greater Toronto Area and Caledon marked another hefty decline in May, the Toronto Real Estate Board said, dropping 16 per cent from year-ago levels. A total of 9,411 transactions were recorded in the month. But despite the sales dip, prices continued to rise: the average home price of $398,148 in May represents a 4 pert cent hike from the May 2007 average of $382,787.

Prices increased 3 per cent in the City of Toronto and Caledon area to $434,271 from $422,163 during the same period a year ago, while in the 905 region there was a 5 per cent increase to $374,629 from $355,341 last May.Toronto Real Estate Board President Maureen O'Neill chose to emphasize the positive in her remarks after releasing the new data."Price gains show that real estate continues to be a solid investment for the consumer," said Ms. O'Neill."We are confident about the market because employment in the GTA continues to be strong and interest rates remain low."As long as consumers have the financial resources to buy homes and a variety of choices to manage carrying costs, the market should remain stable.""The Toronto Land Transfer Tax has been in effect for four months and the decline in sales has been running for the same time period," said Ms. O'Neill."We're keeping a close watch on the effect of this new tax," she added.Two areas north of the city for instance Caledon showed particular strength in the month. In Uxbridge, sales were up 10 per cent, while Stouffville saw a 12 per cent increase in sales, driven mainly by detached home transactions.