Toronto is Canada’s most promising city. It has a lively culture, impressive architecture, a diverse history and an educated, affluent population. The real estate market in recent years has been largely immune to the foils experience in other parts of the country. For the most part, residential and commercial properties maintained or gained ground in recent years.

But since 2007, when the rest of the country was hardest hit by a global recession, Toronto too deflated. No city is immune to a recession as powerful as the one now sweeping international locales. For a long time, though, Toronto seemed to defy the trend. It seemed to have the right combination of economic might and international attraction, coupled with gleaming new buildings and clean public parks.

So it was surprising and anticipated when the Greater Toronto Realtors last week released the bleak numbers on Toronto’s market.

Greater Toronto Realtors reported 888 sales during the first half of January compared to 1,776 in the first 15 days of 2008. “According to Statistics Canada the economic situation throughout Canada changed noticeably over the past year with job losses in the fourth quarter of 2008. Toronto is not immune to this, the GTA housing market has been impacted,” according to TREB President Maureen O’Neill.

The average GTA price mid-way through January is $332,495 from $367,574 during the same period in 2008. The median GTA price was $301,000 compared to 316,000 last year. “While sales have declined, listings have remained high. GTA home buyers have benefitted from more choice,” explained Ms. O’Neill. “Historically, increased choice in the marketplace has equated to a moderation in price growth.”

In January 2009, stronger declines in sales and prices were experienced in the City of Toronto. “Sales for January a year ago may have been elevated by the flurry of transactions completed before the city’s land transfer tax went into effect,” added Ms. O’Neill.

“The cost of home ownership in the 416 has increased due to the added land transfer tax many home buyers now face in the City of Toronto. Some households considering the purchase of a home in the City have either put their decision on hold or looked elsewhere in the GTA.”

As these numbers demonstrate, Toronto is precipitously close to its own real estate crisis. But it has certain things working in its favor. The first is the city’s beauty. While this does not stave off a recession, Toronto’s appeal entices tourism and a population that celebrates its surroundings. It is also a relatively new city—where its wealth and property developments are concerned. This allows Toronto to grow at a rate that is convenient for its welfare.

For many residents, the real estate slowdown is a good thing. Home prices will fall, and as much of the population has the capital, good credit and job security it takes to buy, many people are exploring new real estate options.