The average price of a Canadian home sold in August was $637,673, a figure that has fallen more than 20% since February.

The Canadian Real Estate Association said on Thursday that the number of homes sold on the real estate group’s multiple listings service has now declined for six straight months since the Bank of Canada began raising interest rates. in March.

Home sales are down 24% from the same period last year. And the average selling price has lost nearly $200,000 since hitting an all-time high of $816,720 in February.

Although down from the peak, August’s average sale price is up slightly from the $629,971 seen the previous month. Rishi Sondhi, an economist at TD Bank, says it would be a mistake to infer from this rise that the market has turned, because “it was mainly driven by a rebound in Toronto, where it would be difficult to say that the conditions have reached a turning point.”

WATCH | The real estate agent says the market is like “night and day” compared to last year:

Housing market ‘like day and night’ compared to last year

Toronto real estate agent Nasma Ali says real estate has gone from a frenzy in 2021 to freezing cold in 2022, as buyers wait on the sidelines for rates to stabilize and worries about a recession escalate. calm down.

Nasma Ali, founder of property brokerage One Group, says the city’s housing market is like “night and day” compared to last year, or even early 2022, before the start of rate hikes.

“People are much more cautious and afraid to go into the market right now,” she told CBC News in an interview Thursday. “It’s not just the prices, [it’s] inflation, the economy and an impending recession.”

Across the country, in Vancouver, mortgage broker Simon Bilodeau says the market has fallen back in favor of buyers.

“People who maybe gave up last year because of all the competition and the difficulty of getting their hands on something started to come back,” he said.

“With the speed at which the Bank of Canada has raised rates, it was to be expected that the real estate market would cool down.”

Bank of Montreal economist Robert Kavcic says after the pandemic spiked due to low rates, home sales volumes are now back to about what they were before COVID-19.

But there’s still a big gap between what sellers got used to and what buyers will now accept.

“The stalemate between sellers (who need to realize that early 2022 prices no longer exist) and buyers (who simply can’t pay that much) will continue, and the process could drag on well into the future. next year,” he said.

Mortgage rates have jumped from around 1.5% at the start of the year to over 5% now, and it will take several more months for the full impact to be felt, he said, noting that some buyers who started looking in the spring could still be pre-approved at much lower rates than they are today.

“If you can buy at a discount with a mortgage rate that no longer exists, that could be enticing. But overall, there is still an extremely heavy interest rate shock to absorb, and it will probably take longer. to happen.” ,” he said.