The balance of power has shifted. Where sellers dictated terms just four months ago, June finds buyers holding the leverage across much of the country. Sales have fallen sharply, inventory has rebuilt from its record lows, and the relentless price appreciation of the pandemic era has reversed. The market is now conditioned by rising rates and the hesitancy they produce, and both sides are adapting to a reality that few anticipated at the start of the year.
Bank of Canada (policy rate) and Statistics Canada (inflation).
Sales fall sharply
Transaction activity has dropped well below both last year's frenetic pace and the long-run average in most major markets. The decline is steepest in the regions that ran hottest, where affordability was most stretched and where the withdrawal of cheap credit has hit hardest. Fewer sales reflect both buyers priced out by the stress test and buyers choosing to wait out a falling market. Either way, the volume of activity is a fraction of what it was at the peak.
Inventory returns to the market
The supply drought that defined the boom has broken. Active listings have risen substantially from their winter lows, and months of inventory has climbed back toward balanced or even buyer-favourable territory in several regions. Part of this is more homes coming to market, and part is slower absorption as buyers take their time. The scarcity that powered bidding wars has been replaced by choice, and choice changes buyer behaviour profoundly.
Prices continue lower
Benchmark prices have now fallen for several consecutive months in the most affected markets, and the cumulative decline from the February peak is becoming significant. The correction remains concentrated in the GTA, its commuter belt, and Ontario's pandemic boomtowns, where detached homes are leading the fall. Buyers who feared overpaying in the winter are being vindicated, and the negotiating dynamic has flipped entirely in their favour.
Bank of Canada policy rate, 2022
Overnight target rate at each 2022 decision. Source: Bank of Canada.
How buyers should approach this market
For prepared buyers, this is a market that rewards diligence. Conditions are returning to offers, financing and inspection clauses are back in favour, and there is room to negotiate on price and terms. The critical discipline is financing: with rates rising, buyers must qualify at a higher stress-test rate and budget for further increases. A home that fits the budget today should still fit if rates climb further, because they very likely will.
Inflation (CPI), 2015–2022
Annual average consumer price inflation. Source: Statistics Canada.
Regional resilience
Alberta remains the standout exception. Calgary in particular continues to see solid activity and stable-to-rising prices, insulated by energy-sector strength, in-migration, and affordability that gives it room the overheated Ontario markets never had. Montreal, Ottawa, and Halifax are cooling but from healthier starting points. The divergence between resilient value markets and correcting boom markets is one of the defining features of mid-2022.
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
With the Bank of Canada expected to continue raising rates aggressively through the second half of the year, we anticipate the correction will persist. Sales are likely to stay subdued and prices to keep drifting lower in the most inflated regions until borrowing costs find a ceiling. For buyers, patience and preparation are being rewarded. For sellers, realistic pricing and flexibility are now essential. The market of 2022 has fully inverted from where it began.
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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