Canada’s national average home prices fell for the fifth consecutive month in July, and is now down 23% since reaching a peak in February.

The average price stands at $629,971, down 1.7% from June and 5% compared to a year ago, according to new data released by the Canadian Real Estate Association (CREA).

National home sales were also down, posting a 5.3% month-over-month decline and a 29.3% drop year-over-year.

“July saw a continuation of the trends we’ve been watching unfold for a few months now; sales winding down and prices easing in some relatively more expensive parts of the country as well as places where prices rose most over the past two years,” said Jill Oudil, Chair of CREA. “…some buyers will likely stay on the sidelines until they see what happens with borrowing costs and prices. As they re-enter the market, they’ll find a bit more selection, but not as much as might be expected.”

Importantly, new listings were down by 5.3% compared to June, meaning “some sellers are also playing the waiting game,” said CREA senior economist Shaun Cathcart.

While inventory levels improved further in July, they still remain historically low, Cathcart noted.

Months of inventory rose to 3.4 months, up from the record-low of 1.6, but still below the long-term average of five.

On a seasonally adjusted basis, the MLS Home Price Index, which strips out month-to-month volatility, fell for the fourth consecutive month. It was down 1.7% month-over-month, but remains 10.9% higher compared to last year.

Regionally, Ontario and British Columbia are seeing the brunt of the price declines, as they were also the provinces that saw the largest gains over the past year.

Prices remained flat in the Prairies, while Quebec posted its second monthly decline. Meanwhile in Atlantic Canada, prices in many markets are continuing to rise, “albeit at a much slower pace,” CREA noted.

Removing the high-priced markets of the Greater Toronto and Vancouver areas, the average price stands at $525,971, which is down 0.7% from a year ago.

Cross-country roundup of home prices

Here’s a look at select provincial and municipal average house prices as of July, with their annual and monthly changes, as well as the total decline since the national average price peaked in February 2022.

Location	Average Price	Annual price change	Month-over-month change	Decline from February 2022
Quebec	$489,259	+8.8%	-5%	-2%
B.C.	$915,841	+2.7%	-3.3%	-17%
Ontario	$831,473	-0.5%	-5.6%	-23.5%
Alberta	$437,028	+2.6%	-8.4%	-9%
Halifax-Dartmouth	$533,500	+23.6%	-2.6%	+16%
Barrie & District	$867,300	+11.5%	-4.3%	-8%
Greater Toronto	$1,157,500	+12.9%	-3.9%	-13.5%
Victoria	$975,600	+21.8%	-1%	+3%
Greater Vancouver	$1,207,300	+10.3%	-2.3%	-8%
Greater Montreal	$533,300	+10.6%	-2.5%	-2%
Calgary	$526,900	+12.7%	-0.7%	+9%
Ottawa	$674,500	+6.6%	-3%	-8%
Winnipeg	$351,700	+6.1%	-2.5%	+3%
St. John’s	$320,400	+8.1%	+1.3%	+9%
Edmonton	$403,400	+6.7%	-1.4%	+16%

Price drops not done yet, economists say

Economists, including RBC senior economist Robert Hogue, noted that a bottom in housing is “likely many months away” given that further rate hikes are still expected from the Bank of Canada.

“The pandemic may not be over, but the pandemic-era housing market boom certainly is,” Hogue wrote in a note. “With the balance of power having dramatically shifted in their favour, buyers will be in a position to continue extracting price concessions from sellers for some time to come.”

But others, like Scotiabank’s Farah Omran, believe price declines will soon reach a floor.

“The housing market is currently reacting to a slew of factors—which seems alarming given the speed of the slowdown, but as [those] factors play out, we can expect the housing market to settle into a more comfortable pace of adjustment,” Omran wrote. “In the longer term, we expect demand fundamentals, including an acceleration in immigration and challenges to increasing available supply, to put a floor on prices and sales.”