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Resilient Real Estate Markets Amid Rate Hikes: Signs of Cooling Emerge

In this article, we’re exploring the fascinating dynamics of Canada’s real estate markets, which have shown remarkable resilience despite recent rate hikes by the Bank of Canada. We’ll delve into the details of the trends, factors, and regional insights shaping the real estate landscape.

Sustained Activity and Prices Despite Rate Hikes

Despite the recent rate hikes by the Bank of Canada, the real estate markets in Canada’s major metropolitan areas have shown considerable strength throughout July. Key real estate boards report ongoing year-over-year growth in activity and prices that continue their upward trajectory.

In Toronto, sales witnessed a 7.8% year-over-year surge, while Vancouver experienced a substantial 29% increase in sales.

Factors Behind the Strength

According to Andrew Lis, the Director of Economics and Data Analytics at the Real Estate Board of Greater Vancouver, the current market strength can be partly attributed to weaker sales recorded a year ago when interest rates began to rise.

Lis pointed out that last July marked a significant moment when the Bank of Canada unexpectedly announced a “super-sized” one percent increase to the policy rate. This caught both buyers and sellers off guard and momentarily dampened market activity.

However, Lis also highlighted that the present strength exists against the backdrop of considerably higher borrowing rates compared to the previous year. This underscores the robustness of the market’s demand and the ability of buyers to adapt and qualify even with elevated borrowing costs.

Signs of Cooling Emerge

While the markets displayed year-over-year growth, monthly figures suggest a cooling trend. Monthly sales in several markets, including Vancouver (-3%) and Toronto (-8.8%), witnessed a decline. Additionally, the pace of price gains has moderated.

This easing of pressure on prices is attributed partly to an increase in supply. Sellers have responded to the market by listing their homes in larger numbers, particularly in provinces like Ontario and British Columbia.

RBC economists Robert Hogue and Rachel Battaglia noted that if this trend persists, it could lead to continued moderation in price gains in the coming months. They maintain that the recent cooling activity in major Canadian markets aligns with their anticipation that the initial spring rebound was premature. They predict a gradual path forward, gaining momentum when interest rates eventually decline, potentially unfolding in 2024.

Regional Insights: July Statistics

Here’s a snapshot of July statistics from some of Canada’s largest regional real estate boards:

Greater Toronto Area Rate

  • July 2023 YoY % Change
  • Sales: 75,250 (+7.8%)
  • Benchmark Price (all housing types): $1,118,374 (+4.2%)
  • New Listings: 13,712 (+11.5%)
  • Active Listings: 15,371 (+0.3%)

Greater Vancouver Area Rate

  • July 2023 YoY % Change
  • Sales: 2,455 (+28.9%)
  • Benchmark Price (all housing types): $1,210,700 (+0.5%)
  • New Listings: 4,649 (+17%)
  • Active Listings: 10,301 (-4%)

Montreal Census Metropolitan Area Rate

  • July 2023 YoY % Change
  • Sales: 3,098 (+1%)
  • Median Price (single-family detached): $555,000 (+1%)
  • Median Price (condo): $395,000 (0%)
  • New Listings: 4,354 (-9%)
  • Active Listings: 14,820 (+20%)

Calgary Rate

  • July 2023 YoY % Change
  • Sales: 2,647 (+17.7%)
  • Benchmark Price (all housing types): $567,700 (+5.7%)
  • New Listings: 3,247 (+2.2%)
  • Active Listings: 3,488 (-34.8%)

Ottawa Rate

  • July 2023 YoY % Change
  • Sales: 1,658 (+11%)
  • Average Price (residential property): $746,445 (-4%)
  • Average Price (condominium): $448,380 (+2%)
  • New Listings: 2,758 (-14%)


The Canadian real estate markets have demonstrated remarkable resilience amid recent rate hikes. While annual growth persists, signs of cooling have emerged. The nuanced interplay of interest rates, supply dynamics, and regional trends shapes the complex real estate landscape. As experts predict a slow and bumpy path forward, the markets’ response to evolving economic conditions will undoubtedly be a tale to follow in the months and years ahead.

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