The temperature has changed. Just two months after the market touched record highs, April brings the first clear evidence that the frenzy is over. Sales volumes are slipping, the crush of offers on new listings is thinning, and the psychology that drove buyers to bid without conditions is giving way to caution. The Bank of Canada's tightening campaign, only weeks old, is already rippling through the resale market with a speed that has surprised even seasoned observers.
Bank of Canada (policy rate) and Statistics Canada (inflation).
Sales volumes fall
The most immediate signal of the shift is transaction count. Sales are running well below the torrid pace of late winter and below the levels of a year ago in many markets. Buyers who rushed to transact ahead of rate hikes have largely done so, and the pipeline of newly motivated buyers is thinning as higher borrowing costs push affordability out of reach. Fewer sales are the leading edge of a cooling market, and they typically precede price adjustments.
Bank of Canada policy rate, 2022
Overnight target rate at each 2022 decision. Source: Bank of Canada.
Prices ease off the peak
Benchmark prices in the hottest markets have begun to slip from their February highs. The declines are modest so far, but the momentum has clearly reversed, and the ground-oriented homes in suburban Ontario that led the boom are now leading the retreat. Sold-over-asking premiums have compressed sharply, and properties that would have drawn a dozen offers in February are now selling at or near list price, or sitting for longer than sellers expect.
Inventory starts to build
For the first time in many months, active listings are rising in several regions. Some of this reflects normal spring seasonality, but part of it is behavioural: sellers who watched February's records are rushing to list before conditions soften further, while buyers hold back. The combination of more supply and less demand is the classic recipe for a market rebalancing, and months of inventory is climbing from its record lows toward more normal territory.
Buyer psychology shifts
Perhaps the most important change is not in the data but in sentiment. The fear of missing out that powered the frenzy has been replaced by a fear of overpaying at the top. Buyers who feel they have leverage for the first time in years are slowing down, adding conditions back into offers, and negotiating. This shift in psychology can be self-reinforcing, as hesitancy begets softer prices, which validates further hesitancy.
Inflation (CPI), 2015–2022
Annual average consumer price inflation. Source: Statistics Canada.
Regional variation
The turn is not uniform. The GTA and its commuter belt, along with pandemic boomtowns that saw the most extreme gains, are cooling fastest because they had the furthest to fall. Vancouver is softening more gradually. Calgary, buoyed by strong energy prices and starting from a far more affordable base, is proving notably resilient and continues to see healthy activity. Montreal, Ottawa, and Halifax sit somewhere in between.
Verified · 2022
Beginning March 2, 2022, the Bank of Canada raised its policy rate from 0.25% to 4.25% by year-end — the fastest tightening cycle in decades.
Looking ahead
April marks the beginning of an adjustment that we expect to deepen through the spring and summer. With the Bank of Canada committed to further and larger rate increases, borrowing costs will keep climbing and affordability will keep tightening. The market that peaked in February is now in a genuine correction, and the question is no longer whether prices will fall but how far and how fast. Buyers gain leverage; sellers must recalibrate expectations.
This analysis is built on Neighbourly.io — the real estate data API for Canada. Standardized addresses, boundaries, demographics, permits and market signals through a single interface.
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