Fewer home sales in Toronto contributed to an overall decline in activity across Canada in May, according to a new report.

The Canadian Real Estate Association (CREA) released statistics Wednesday showing a 9.5 per cent drop across the country last month.

“While activity declined in more than 70 per cent of local markets, the lower national figure resulted largely from fewer sales in Toronto, Vancouver and Ottawa,” says the report.

Specifically, Toronto had a 1.2 per cent decline in sales, compared to the same month last year. The drop was not as sharp as in Vancouver and Ottawa, which fell 10.3 per cent and 13.9 per cent, respectively.

The Toronto market is also experiencing a surge of new listings, with 18,940 hitting the market in May – an increase of 38.4 per cent compared to May 2009.

"Homebuyers now have more choice and are likely be in less of a rush to purchase than they were recently, so the amount of time it takes to sell a home is expected to rise in the coming months," CREA Chief Economist Gregory Klump said.

Meanwhile, CREA President Georges Pahud said the decline in sales activity was likely the result of new mortgage regulations and rising mortgage rates. He said the changes pulled forward a number of sales into April that would have otherwise taken place at a later date.

For the detailed PDF report click here.