OPINION: The last two monthly declines in the Composite index are mostly due to Toronto (top chart), but there are signs that the downward pressure on prices in that city is fading. For instance, its unsmoothed index (see note on methodology next page) fell 0.7% in October after declining 3.7% in August and 2.1% in September (middle chart). Following the introduction last April of a tax on foreigners’ acquisitions, market conditions (as depicted by the active-listings-to-sales ratio) loosened in Toronto. But they went from extremely tight to balanced (active-listings-to-sales close to its long-term average – bottom chart). Furthermore, market conditions have stabilized over the last few months. Balanced and stable market conditions support the view that downward pressure on home prices is fading in that city. Market conditions evolving from tight to balanced is a positive development for affordability. Unfortunately, this cannot be said of Vancouver, where conditions remained tight despite the implementation in August 2016 of a tax on foreigners’ acquisitions. In the latter city, prices of condos (the most affordable category of dwellings) rose more than 17% over the last 12 months.