After months of record-setting gains, home sales and prices took a breather in April compared to March’s results. Annual gains, meanwhile, were skewed due to last year’s historic decline in real estate activity, in which home sales fell to their lowest level ever.

Canada’s average home price (not seasonally adjusted) was $695,656 in April, down nearly 3% compared to March, but up 41.9% from last year, according to data from the Canadian Real Estate Association (CREA). Removing the high-priced markets of the Greater Toronto and Vancouver areas, the average price still stands at $551,000, up 42% from last year.

Another encouraging sign was the first increase in housing inventory in more than a year, which rose to two months, up from last month’s record low of 1.7. This is the amount of time it would take to liquidate current inventories at today’s rate of sales.

“While we still have a ways to go, measures of market balance have finally turned a corner and monthly price growth has decelerated,” said CREA’s senior economist, Shaun Cathcart. “I believe we’ve all wanted to see the temperature turned down on this market after the last year and it looks as though that is finally happening.”

Cross-Country Roundup of Home Prices

While the brakes were gently applied to prices in most markets across the country, Ontario’s cottage country continued to see rapid price acceleration. Prices rose most in Southern Georgian Bay ($635,600, +46.9% YoY, +7% MoM), Kawartha Lakes ($591,200, +50.5% YoY, +4.5% MoM), and the Lakelands region, comprising Parry Sound, Muskoka, Haliburton and Orillia ($566,900, +49.9% YoY, +4.9% MoM).

Here’s a look at some more regional and local housing market results for April:

• Ontario: $869,788 (+46%)
• Quebec: $448,601 (+32.6%)
• B.C.: $943,845 (+28.7%)
• Alberta: $439,319 (+21.1%)
• Halifax-Dartmouth: $466,574 (+38.9%)
• Barrie & District: $723,000 (+37.1%)
• Ottawa: $637,700 (+32.9%)
• Greater Montreal Area: $487,700 (+26.5%)
• Winnipeg: $314,900 (+14.5)
• Greater Vancouver Area: $1,152,600 (+12%)
• Victoria: $792,100 (+10.6%)
• Calgary: $446,600 (+9%)
• Edmonton: $337,100 (+7.1%)
• St. John’s: $267,200 (+3.2%)

Will Home Prices Continue to Moderate?

The question on everyone’s minds is whether April’s pullback in aggressive price growth will persist in the coming months, or whether we’re still on track for further gains.

“Despite falling in April, it’s important to note that both sales and price levels remained at near-record levels. This means that markets stayed hot last month,” wrote TD economist Rishi Sondhi in a research note.

“That said, our longstanding view is that Canadian home sales and prices would eventually cool from their stratospheric levels. While April may have marked the beginning of this trend…more months of information are required to assess whether the market still has some upward momentum, or if activity is indeed on a cooling path.”

RBC’s Robert Hogue noted that rising longer-term interest rates, deteriorating affordability, a stricter uninsured mortgage stress test and more people returning to the office will likely “work to cool demand down a few degrees.”

“Soaring prices could also attract more sellers. This combination would ease the extreme imbalance that has characterized the market since last summer and set the stage for a moderation in the rate of price increases later this year,” he wrote. ” In the meantime, though, prices are likely to keep rising rapidly.”